BUSINESS FORMULAS
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31 Terms
THEME 1
Market Share
Total Sales of Business / Total sales in market x 100
Price Elasticity of Demand
% Change in quantity demanded / % Change in price
Income Elasticity of Demand
% Change in quantity demanded / % Change in income
% Mark Up (Cost - Plus Pricing)
Unit cost + mark up
Unit Cost
Total costs / Number of units
THEME 2
Sales Volume
Sales Revenue / Selling Price
Sales Revenue
Selling Price x Sales Volume
Total Variable Costs
Average Variable Costs x Quantity Sold per unit
Total Costs
Total Variable Costs + Total Fixed Costs
Total Revenue
Quantity Sold x Average Selling Price
Net Cash Flow
Inflows - Outflows
Profit [or Loss]
Total Sales - Total costs
Profit Margin
Profit / Sales Revenue x 100
Net Cash Flow
Total Cash Inflow - Total Cash Outflow
Opening Balance
Closing Balance from previous period
Closing Balance
Opening Balance + Net Cash Flow
Break Even
Fixed Costs / (Selling Price per Unit - Variable Costs per Unit [aka Contribution])
Contribution per Unit
Selling Price per Unit - Variable Cost per Unit
Total Contribution
Contribution per Unit x Quantity sold
Margin of Safety
Actual Sales - Break Even level of Sales
Gross Profit
Sales Revenue - Cost of Sales
Operating Profit
Gross Profit - Expenses
Net Profit
Operating Profit - interest OR tax
Gross Profit Margin
Gross Profit / Sales Revenue x 100
Operating Profit Margin
Operating Profit / Sales Revenue x 100
Net Profit Margin
Net Profit / Sales Revenue x 100
Current Ratio
Current Assets / Current Liabilitis : 1
Acid Test Ratio
Current Assets - Inventory / Current Liabilities
Variance
Actual Figures - Budgeted Figures