IB Business Management Formulas not given on Formula Sheet

Target profit output

fixed costs + taregt profit / contribution per unit

Labour Turnover (%)

(number of staff leaving over a year / average number of staff employed in a year ) x 100

Market Share (%)

(total company sales in a year / total sales in a market) x 100

Cost to Buy

Price x Quantity

Cost to Make

Variable costs x Quantity

Total revenue

Price x Quantity

Profit

Total revenue - Total costs

Gross Profit

Sales revenue - Cost of goods sold

Net profit before interest and tax

Gross profit - expenses & overheads

Working Capital

Current Asstes - Current Liabilities

Straight line method (Depreciation)

(origninal cost-residual value)/ expected useful life of asset

Reducing balance (Depreciation)

cost of original asset x rate of depreciation

Payback Period

intial investment cost / anual cash flow from investment

Break-even quantity

Fixed costs / contribution per unit

Contribution per unit

Selling price - Variable costs

Margin of safety

current output - break even quantity

Break even revenue

(fixed costs / contribution per unit) x price per unit