FORMULAS

Total variable costs = Average cost x quantity

Total costs = Fixed costs + Variable costs
Sales revenue = Price x quantity sold
Average revenue = Total revenue / Quantity
Average revenue = Price
Total contribution = Total revenue - Total variable costs
Contribution per unit = Selling price - Average variable cost

Break-even = Fixed costs / Contribution per unit

Q = (Fixed costs + Target profit) / Contribution per unit
Break-even price = Total cost / Output
Price = (Profit target + Total cost) / Output
Margin of safety = Current level of Output - break-even
output
COGS = Opening stock + Purchases - Closing stock

Gross profit = Sales revenue - COGS

NPBIT = Gross profit - E (less expenses)
NPBT= NPBIT - interest
NPAIT = NPBT - tax
Break-even = Fixed costs / Contribution per unit
Working capital = Current assets - Current liabilities
Total assets = Fixed assets + Current assets
Net assets = Fixed assets + Working capital - Long
term liabilities
Net assets = Total assets - Total liabilities

Equity = Net assets

Depreciation allowance = (Original cost - residual value) /

Expected life (years)

Net assets = Total assets - Total liabilities

Payback period = (Payback in last negative year / Net cash

flow in frist positive year) x 12
Variance = Actual outcome - Budgeted outcome