Formula and Key Data

Taken from AQA website.

What is the equation for the Revenue (Sale or Turnover)?

Selling price per unit X Number of units sold

What is the equation for Variable costs (Total variable costs)?

Variable cost per unit x Number of units sold

What is the equation for Total costs?

Fixed costs + Variable costs

What is the equation for profit (Revenue)?

Total revenue - Total costs

What is the equation for profit (Contribution)?

Total contribution - Fixed costs

What is equation for market capitalisation of a business?

Number of issued shares X Current share price

What is the equation for the expected value of a decision with two possible outcomes?

(Probability of outcome 1 X Value of outcome 1) + (Probability of outcome 2 X Value of outcome 2)

What is the equation for net gain?

Expected value - Initial cost of decision

What is the equation for market growth (%)?

Change in the size of the market over a period/ Original size of the market × 100

What is the equation for market share (%)?

Sales of one product OR brand OR business/ Total sales in the market × 100

What is equation for added value?

Sales revenue - costs of bought-in goods and services

What is the equation for labour productivity?

Output over a time period/ Number of employees

What is the equation for the unit costs (average costs)?

Total costs/ Number of units of output

What is the equation for capacity utilisation (%)?

Actual output/ Maximum possible output × 100

What is the equation for the return on investment?

Profit from the investment (£)/ Cost of the investment (E) × 100

What is the equation for gross profit?

Revenue - Cost of Sales

What is the equation for operating profits?

Gross profit - Operating Expenses

What is the equation for profit for the year?

Operating profit + Profit from other activities - Net finance costs - Tax

What is the equation for gross profit margin (%)?

Gross profit/ Revenue × 100

What is the equation for operating profit margins (%)?

Operating profit/ Revenue × 100

What is the equation for profit for the year margin?

Profit for year/ Revenue × 100

What is the equation for variance?

Budgeted figure- actual figure

What is the equation for contribution per unit?

Selling price - Variable costs per unit

What is the equation for total contribution?

Contribution per unit x Units sold

Or

Total revenue — Total variable costs

What is the equation for break even output?

Fixed costs/ Contribution per unit

What is the equation for margin of safety?

Actual level of output - Break-even level of output

What is the equation for labour turnover?

Number of staff leaving/ Number of staff employed by the business × 100

What is the equation for employee retention rate (%) for a particular time period?

Number of employees who remained with the business for the whole period of time/ Number of employees at start of the time period x100

What is the equation for employee costs as percentage of turnover?

Employee costs/ Turnover × 100

What is the equation for labour costs per unit?

Labour costs/ Units of output

What is the equation for return on capital employed (ROCE) (%)?

Operating profit/ Total equity + non-current liabilities X100

Where total equity + non-current liabilities = capital employed

What is the equation for current ratio?

Current assets/ Current liabilities

What is the equation for gearing?

Non-current liabilities/ Total equity + non-current liabilities x100

Where total equity + non-current liabilities = capital employed

What is the equation for payable days?

Payables/ Cost of sales x 365

What is the equation for receivable days?

Receivables/ Revenue × 365

What is the equation for inventory turnover?

Cost of sales/ Average inventories held

What is the equation for average rate of return (%)?

Average annual return (£)/ Initial cost of project (£) - × 100