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Business| finance equations
A level Business finance equations
21
Business
10th Grade
03/09/2021

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Term
Revenue expenditure
Definition
Money used to keep the business running
Term
Revenue
Definition
Sales price * output
Term
Profit loss
Definition
revenue - total cost
Term
Total cost
Definition
Fixed costs + Variable Costs
Term
Sales revenue
Definition
selling price * number of units sold
Term
Profit
Definition
Sales revenue - total costs
Term
Contribution
Definition
selling price - variable cost per unit
Term
Break even point
Definition
Fixed costs / contribution
Term
Sum of all incomes
Definition
Total inflow
Term
Sum of all expenditure
Definition
total outflow
Term
Net cashflow
Definition
total income - total outflow
Term
Balance carried forwards
Definition
net cashflow + balance brought fowards
Term
gross profit
Definition
revenue - variable costs
Term
Net profit
Definition
Revenue - total fixed costs
Term
Productivity
Definition
Quantity of output / factor of production (i.e. number of employees)
Term
Return on capital employeed
Definition
Net profit/ capital employed *100
Term
Gross profit margin
Definition
gross profit / sales revenue * 100
Term
Net profit margin
Definition
net profit / sales revenue *100
Term
Current ratio
Definition
Current assests / current liabilities
Term
Acid test ratio
Definition
Current assests -inventories / current liabilities
Term
Added Value
Definition
Selling price - Cost of manufacture
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