Formulas:

Theme 1
Market share = (Sales of a product or business/ Total market sales) x 100
Price elasticity of demand = % Change in quantity demanded/ % Change in price
Income elasticity of demand = % Change in quantity demanded/ % Change in
income
Theme 2
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
Variance = Actual Budget
Gross profit = Sales revenue minus cost of sales
Operating profit = Gross profit minus overheads
Net profit = Operating Profit +/- finance costs
Gross profit margin = (Gross profit / Sales revenue) x 100
Operating profit margin = (Operating profit/ Sales revenue) x 100
Profit for the year (net profit) margin = (Profit for the year / Sales revenue) x 100
Current ratio = Current assets/ current liabilities
Acid test ratio = (Current assets stock) / current liabilities
Productivity (labour) = Output per period (units)/ Number of employees in that
period
Capacity utilisation = (Actual level of output/ Maximum possible output) x 100