Business equations
0.0(0)
Studied by 0 people
Call Kai
Learn
Practice Test
Spaced Repetition
Match
Flashcards
Knowt PlayCard Sorting
1/51
Last updated 12:10 PM on 2/24/23
Name | Mastery | Learn | Test | Matching | Spaced | Call with Kai |
|---|
No analytics yet
Send a link to your students to track their progress
52 Terms
1
New cards
Sales Revenue or Turnover
selling price per unit x quantity of units sold
2
New cards
Total Variable costs
variable cost per unit x number of units sold
3
New cards
Total costs
fixed costs + variable costs
4
New cards
Profit
total revenue - total costs
5
New cards
Market Capitalisation
numbers of issued shares x current share price
6
New cards
Expected Value of a decision with two possible outcomes
(Pay-off of A × probability of A) + (Pay-off of B × probability of B)
7
New cards
Net Gain
expected value - initial costs
8
New cards
Market Growth (%)
new market size - old market size
\--------------------------------------- x 100
old market size
\--------------------------------------- x 100
old market size
9
New cards
Market Share (%)
sales
\------------------- x 100
total market size
\------------------- x 100
total market size
10
New cards
Sales Growth (%)
sales this year - sales last year
\---------------------------------- x 100
sales last year
\---------------------------------- x 100
sales last year
11
New cards
Price Elasticity of Demand (PED)
% change in quantity demanded
\------------------------------------- x 100
% change in price
\------------------------------------- x 100
% change in price
12
New cards
Income Elasticity of Demand YED)
% change in quantity demanded
\------------------------------------- x 100
% change in real income
\------------------------------------- x 100
% change in real income
13
New cards
Capacity Utilisation (%)
output
\------------ x 100
capacity
\------------ x 100
capacity
14
New cards
Unit cost
total costs
\------------
units output
\------------
units output
15
New cards
Labour Productivity
output per period
\------------------------
number of employees
\------------------------
number of employees
16
New cards
Re-order level
lead time (in days) x average daily usage + buffer stock level
17
New cards
Return on Investment (%) (ROI)
return on investment (£)
\---------------------------- x 100
cost of investment (£)
\---------------------------- x 100
cost of investment (£)
18
New cards
Percentage Change in Profit
current year’s profit - previous year’s profit
\----------------------------------------------- x 100
previous year’s profit
\----------------------------------------------- x 100
previous year’s profit
19
New cards
Gross Profit
sales revenue - cost of sales
20
New cards
Operating Profit
sales revenue - cost of sales (gross profit) - operating expenses
21
New cards
Profit for the year
operating profit + other profit - net finance - tax
22
New cards
Gross Profit Margin (%)
gross profit
\--------------- x 100
sales revenue
\--------------- x 100
sales revenue
23
New cards
Operating Profit Margin (%)
operating profit
\------------------- x 100
sales revenue
\------------------- x 100
sales revenue
24
New cards
Profit for the Year (%)
profit for the year
\-------------------- x 100
sales revenue
\-------------------- x 100
sales revenue
25
New cards
Variance
budgeted figure - actual figure
26
New cards
Contribution per unit
selling price per unit - variable costs per unit
27
New cards
Total contribution (2)
total revenue - total variable costs
OR
contribution per unit x number of units sold
OR
contribution per unit x number of units sold
28
New cards
Break-even output
fixed costs
\-----------------------
contribution per unit
\-----------------------
contribution per unit
29
New cards
Margin of Saftey
actual output - break-even output
30
New cards
Labour productivity
output per period
\------------------------
number of employees
\------------------------
number of employees
31
New cards
Labour cost per unit
labour costs
\----------------
units of output
\----------------
units of output
32
New cards
Employee costs as a % of turnover
employee costs
\------------------ x 100
sales turnover
\------------------ x 100
sales turnover
33
New cards
Labour turnover (%)
number of staff leaving
\--------------------------------------- x 100
average number of staff employed
\--------------------------------------- x 100
average number of staff employed
34
New cards
Labour retention (%)
number of staff employed at end of period - number of leavers
\------------------------------------------------------------ x100
number of staff employed at start of period
\------------------------------------------------------------ x100
number of staff employed at start of period
35
New cards
Net current assets
current assets - current liabilities
36
New cards
Net assets
net current assets + non-current assets - non-current liabilities
37
New cards
Working capital
current assets - current liabilities
38
New cards
Profit before tax
operating profit - other expenses
39
New cards
Profit after tax
profit before tax - tax
40
New cards
Retained profit
profit after tax - dividends
41
New cards
Current ratio
current assets
\-------------------
current liabilities
\-------------------
current liabilities
42
New cards
Acid Test Ratio
current assets - inventories
\------------------------------
current liabilities
\------------------------------
current liabilities
43
New cards
Return on capital employed (%) (ROCE)
operating profit
\----------------------------------------------------------- x 100
total equity + non-current liabilities (capital employed)
\----------------------------------------------------------- x 100
total equity + non-current liabilities (capital employed)
44
New cards
Inventory turnover
cost of sales
\--------------------------
cost of average stock held
\--------------------------
cost of average stock held
45
New cards
Payables Days
payables
\--------------- x 365
cost of sales
\--------------- x 365
cost of sales
46
New cards
Receivables Days
receivables
\--------------- x 365
sales revenue
\--------------- x 365
sales revenue
47
New cards
Gearing (%)
non-current liabilities
\----------------------------------------------------------- x 100
total equity + non-current liabilities (capital employed)
\----------------------------------------------------------- x 100
total equity + non-current liabilities (capital employed)
48
New cards
GDP
total consumer spending + business investment + government spending + the value of exports - the value of imports
49
New cards
Average Rate of Return (%) (ARR)
average net return
\----------------------- x 100
investment
\----------------------- x 100
investment
50
New cards
Payback Period
amount invested
\--------------------
annual net return
\--------------------
annual net return
51
New cards
Net cashflow
cash inflow - cash outflow
52
New cards
Absenteeism
number work days lost through absence
\----------------------------------------------- x 100
total possible days worked
\----------------------------------------------- x 100
total possible days worked
Note 
Flashcards (45)