Profit
Total revenue - total costs
Gross profit
Sales revenue- cost of goods sold
Sales revenue
quantity sold x price per unit
Net profit
Gross profit -other expenses
Closing balance
Opening balance + net cash flow
Opening balance
The previous months closing balance
Total cash available
Opening balance +total inflows
Net cash flow
Total inflows - total outflows
Break even
Fixed cost/ contribution per unit
Contribution per unit
Price per unit - variable cost per unit
Margin of safety
Actual sales - break even point
Profit (using contribution)
Contribution per unit x margin of safety
Total contribution
Sales revenue - total variable costs
Total variable cost
Variable cost per unit x quantity sold
Total costs
Total fixed costs + total variable costs
Costs of goods sold
(opening inventory’s + purchases) - closing inventory’s
Straight line depreciation
( historic value - residual value) / expected life
Reducing balance depreciation
Original value x ( % value that remains x power of number of years)
Net book value
Cost - depreciation
Net current assets (working capital)
Current assets - current liablitys
Net assets
Total assets - total liabilities
Capital employed
(Owners capital + retained profit) - drawings
Balance sheet
Net assets = capital employed
Gross profit margin
(Gross profit/sales revenue) x100
Net profit margin
(Net profit/sales revenue) x100
Mark up
(Gross profit/ cost of sales ) x 100
Return on capital employed (ROCE)
(Net profit before interest and tax) / capital employed x100
Current ratio
Current assets / current liabilities
Liquid capital ratio or acid test ratio
(Current assets - inventory) / current liability’s
Trade receivable day
(Trade recievables / credit sales ) x365
trade payable days
(Trade payables/credit purchases) x365
Inventory turnover
(Average inventory /cost of sales) x365
Average inventory
(Opening inventory+ closing inventory) / 2
