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    This document provides formulas for various finance topics including cash flow forecasting, breakeven analysis, ratios, and financial statements. It lists the name of each topic, the relevant formulas, and shows how to set up the equation by substituting numbers. Formulas are provided for net cash flow, closing balance, total revenue, total costs, profit, contribution, breakeven output, margin of safety, gross profit, cost of sales, net book value, net current assets, net assets, capital employed, gross profit margin, mark up, net profit margin, return on capital employed, current ratio, liquid capital ratio, inventory turnover, average inventory, trade payable days, and trade receivable days.

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    This document provides formulas for various finance topics including cash flow forecasting, breakeven analysis, ratios, and financial statements. It lists the name of each topic, the relevant formulas, and shows how to set up the equation by substituting numbers. Formulas are provided for net cash flow, closing balance, total revenue, total costs, profit, contribution, breakeven output, margin of safety, gross profit, cost of sales, net book value, net current assets, net assets, capital employed, gross profit margin, mark up, net profit margin, return on capital employed, current ratio, liquid capital ratio, inventory turnover, average inventory, trade payable days, and trade receivable days.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    5 views2 pages

    Formulas

    Uploaded by

    TayJS
    This document provides formulas for various finance topics including cash flow forecasting, breakeven analysis, ratios, and financial statements. It lists the name of each topic, the relevant formulas, and shows how to set up the equation by substituting numbers. Formulas are provided for net cash flow, closing balance, total revenue, total costs, profit, contribution, breakeven output, margin of safety, gross profit, cost of sales, net book value, net current assets, net assets, capital employed, gross profit margin, mark up, net profit margin, return on capital employed, current ratio, liquid capital ratio, inventory turnover, average inventory, trade payable days, and trade receivable days.

    Copyright:

    © All Rights Reserved
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    of 2

    U3 Personal and Business Finance

    Formulas
    1. Write down the formula (you will get a mark for this even if you get the wrong calculation)
    2. Substitute the formula with the numbers to show workings
    3. Insert the final answer with the appropriate unit of measurement, e.g. £, % etc.

    Topic Formula Equation

    net cash flow total cash inflows - total cash outflows

    Cash flow closing balance opening balance + net cash flow


    forecast
    closing balance from previous month; or
    opening balance
    closing balance - net cash flow

    total revenue selling price × quantity

    total costs fixed costs + variable costs

    (net) profit total revenue - total costs

    total revenue - variable costs; or


    total contribution
    Breakeven contribution per unit × quantity
    analysis contribution (per selling price (per unit) - variable cost (per
    unit) unit)
    profit using
    contribution per unit × margin of safety
    contribution

    breakeven output fixed costs ÷ contribution per unit

    margin of safety sales - breakeven output

    gross profit revenue - cost of sales


    Statement of
    cost of sales opening inventory + purchases - closing
    comprehensive
    (goods sold) inventory
    income
    (net) profit/loss gross profit - expenses + other income
    Topic Formula Equation

    net book value original (historic) cost - depreciation

    net current
    Statement of current assets - current liabilities
    assets
    financial
    non-current assets + net current assets -
    position net assets
    non-current liabilities
    opening capital + profit -drawings; or
    capital employed
    = net assets
    gross profit
    gross profit ÷ revenue × 100
    margin

    mark up gross profit ÷ cost of sales × 100


    Ratios
    (profitability)
    (net) profit margin (net) profit ÷ revenue × 100

    return on capital
    profit ÷ capital employed × 100
    employed (ROCE)

    current ratio current assets ÷ current liabilities


    Ratios
    (liquidity) liquid capital (current assets - inventory) ÷ current
    (acid test) ratio liabilities
    inventory
    average inventory ÷ cost of sales × 365
    turnover
    (opening inventory + closing inventory) ÷
    average inventory
    Ratios 2
    (efficiency) trade payable
    trade payables ÷ credit purchases × 365
    days
    trade receivable
    trade receivables ÷ credit sales × 365
    days

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