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