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  • All IGCSE Business Formulae

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    Raghav Sharma
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    This document provides definitions for common business formulae used in calculating financial metrics like revenue, costs, profits, productivity, margins, ratios and break-even analysis. It defines 16 key formulas including defining revenue as quantity sold times price, profit as revenue minus costs of sales, and break-even point as fixed costs divided by contribution per unit.

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    This document provides definitions for common business formulae used in calculating financial metrics like revenue, costs, profits, productivity, margins, ratios and break-even analysis. It defines 16 key formulas including defining revenue as quantity sold times price, profit as revenue minus costs of sales, and break-even point as fixed costs divided by contribution per unit.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    3K views1 page

    All IGCSE Business Formulae

    Uploaded by

    Raghav Sharma
    This document provides definitions for common business formulae used in calculating financial metrics like revenue, costs, profits, productivity, margins, ratios and break-even analysis. It defines 16 key formulas including defining revenue as quantity sold times price, profit as revenue minus costs of sales, and break-even point as fixed costs divided by contribution per unit.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 1

    All IGCSE Business

    Formulae

    compiled by two00five on reddit

    Revenue: Quantity sold x Price


    Productivity: Output / Quantity of input
    Labor Productivity: Output / Number of employees
    Working Capital: Current Assets - Current

    Liabilities
    Capital Employed (or Shareholder's funds) Total

    Assets - Total Liabilities


    Profit: Revenue - Cost of sales
    Profit (from Break even graph): Total Revenue -

    Total Costs or TR-TA


    Total Costs: Fixed Costs + Variable Costs or FC+VC
    Average Cost: Total Costs / Total Number of units

    produced
    Break even point: Fixed costs / Contribution per

    unit or FC/(SP-VC)
    Contribution per unit: Selling price - Variable

    costs
    Margin of safety: Maximum output - Break even

    output
    Gross profit: Revenue - Cost of sales (or Variable

    costs)
    Gross profit margin: Gross profit / Revenue x 100
    Net profit: Gross profit - Expenses (or Fixed costs)
    Net profit margin: Net profit / Revenue x 100
    Return on Capital Employed: Net profit / Capital

    Invested x 100
    Current ratio: Current Assets / Current liabilities
    Safest ratio is 2:1 or 3:1
    Acid Test Ratio (or Quick Ratio): Current Assets -
    Inventory (or Stock) / Current Liabilities
    Safest ratio is 1.5:1

    Remember to give all ratio answers in 2 decimal places without rounding

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