Business key calculations

Market share =

(sales of a product or business / total market share) x100

PED =

% change in quantity demanded / % change in price

Market share =

(sales of a product or business / total market share) x100

PED =

% change in quantity demanded / % change in price

YED =

% change in quantity demanded / % change in income

Net cash flow =

total inflows - total outflows

Sales volume =

total number of units sold over a period of time

Sales revenue =

number of units sold x unit price

Total variable costs

number of units sold x variable cost per unit

Total costs =

fixed costs + variable costs

Contribution per unit =

selling price per unit - variable cost per unit

Total contribution =

contribution per unit x number of units sold

Break even =

fixed costs / contribution per unit (revenue - variable costs)

Variance =

Actual - Budget

Gross profit =

sales revenue - cost of sales

Operating profit =

gross profit - overheads

Net profit =

operating profit +/- finance costs

Gross profit margin

(gross profit / sales revenue) x100

Operating profit margin =

(operating profit / sales revenue) x100

Profit for the year (net profit) margin =

(Profit for the year / sales revenue) x100

Current ratio =

current assets / current liabilities

Acid test ratio =

current assets - stock / current liabilities

Productivity =

output per period (units) / number of employees

Capacity utilisation =

(actual level of output / maximum possible output) x100

ARR (%) =

(net return for project (£) / number of years) / initial cost of project x100

Gearing (%) =

non current liabilities / capital employed x100

ROCE (%) =

(operating profit / capital employed) x100

Labour productivity =

output over period of time / number of employees

Labour turnover (%)

(number if staff leaving over period of time / average number of staff employed over same period of time) x100

Labour retention =

(number of employees remaining over period of time / average number of employees over same period of time) x100

Absenteeism (%) =

(number of staff absent over period of time / average number of employees over same period of time) x100