Professional Documents
Culture Documents
Section 1
Adding value – selling price – cost of raw materials
Section 4
Productivity = Total output/number of workers or quantity input
Revenue = price x quantity
Total costs = fixed costs +variable costs
Profit = total revenue – total costs
Average costs = total costs/total output
Break-even = fixed costs/contribution (selling price – variable costs per unit)
Margin of safety = actual production level – break-even level of output
Section 5
Net cash flow = inflows – outflows
Opening balance = Always the same as the closing balance from the previous month
Closing balance = opening balance + net cash flow
Working capital or net current assets = current assets – current liabilities
Gross profit = sales revenue – cost of sales
Profit or net profit = gross profit – operating expenses
Profit or net profit after tax = profit or net profit – tax
Retained profit = profit after tax – dividends
Gross profit margin = gross profit/sales revenue x100
Profit margin = profit/sales revenue x 100
Return on capital employed = Profit or net profit/capital employed x 100
Current ratio = current assets/current liabilities
Acid test ratio = current assets – inventory/current liabilities