Equations


Unit 1

1.1

Total cost:

Total cost = total fixed costs + total variable costs


Total variable cost:

Total variable cost = quantity sold * cost per unit


Revenue:

Revenue = price * quantity


Profit:

Profit= total revenue - total costs


Average Unit cost:

Average Unit cost = Total costs / output





Unit 5

5.1

Break even point(from break even chart):

when total revenue = total costs


Profit/loss(from break even chart):

total revenue - total costs


Margin of Safety:

Margin of Safety = actual/budgeted output - break even point












Unit 6






Unit 6

6.1


Net cash flow:

Net cash flow = total cash inflows - total cash outflows in a given period


Opening balances:

Opening balances = closing balance of the previous period


Closing balances:

Closing balance = opening balance + net cash flow




6.3

Average rate of return:

Average rate of return(%) = average annual profit * (total profit / number of years) * 100 / cost of investment





6.4

Gross profit:

Gross profit = sales revenue - cost of sales


Operating profit:

Operating profit = gross profit - overheads


Net profit:

Net profit = gross profit - overheads, tax and interest


Net profit margin:
Net profit margin = (net profit / sales revenue) * 100


Net current assets:

Net current assets = total current assets - total current liabilities


Net assets:
Net assets = non-current assets + net current assets - non-current liabilities


Total equity:

Total equity = value of net assets


Market share:

Market share = (sales of one product/brand/business / total sales of market as a whole) * 100


Market size:

Market size = the total volume of sales of a product OR total value of sales of a product