Notesale: Turn your study into money

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Business Studies formulas
% = Expressed as a percentage

Total revenue = Sales Revenue = Turnover = Selling price (P) * Number of units sold (Q) = P*Q

Total Variable costs = Variable cost per unit * Number of items sold

Total costs = Fixed costs + Variable costs

Profit = Total revenue – Total costs

Profit = Total contribution – Fixed costs

Market capitalisation = Number of shares issued * Current share price

Average rate of return (ARR) =

Net return from porject
∗ 100
Initial cost of project

(%)

Cost of goods sold

Inventory turnover = Average inventories held (Also known as stock turnover)

Receivables

Receivable days = Sales revenue ∗ 365 (Also known as Debtor days, the number of days it takes
people to pay you
...
)

Non−current liabilities

Gearing = Total equity+ Non−current liabilities ∗ 100 (%)

Gearing =

Non−current liabilities
Capital employed

Current assets

Current ratio = Current liabilities

∗ 100 (%) As Total equity+ Non-current liabilities = Capital employed

Return on capital employed (ROCE) =

Operating profitNet return from porject
∗ 100
Total equity+ Non−current liabilities

(%)

Return on capital employed (ROCE) =

Operating profitNet return from porject
∗ 100
Capital employed

(%)

As Total equity+ Non-current liabilities = Capital employed

Labour cost per unit =

Labour costs
Units of output

Employee costs as a percentage of revenue (or turnover) =

Employee costs
∗ 100
Sales revenue

(%)

Employee retention rate for a time period =
Number of employees at the end of period−Number of leavers
Number of employees at the end of period

∗ 100 (%)

Number of staff leaving during year

Labour turnover = Average number of staff employed during year ∗ 100 (%)

Profit for year

Profit for the year margin = Sales revenue ∗ 100 (%)

Operating profit =

Operating profit
∗
Sales revenue

100 (%) (Also known as Profit from operations = Operating profit

margin)

Gross profit

Gross profit margin = Sales revenue ∗ 100 (%) Also known as Gross profit margin)

Margin of safety (on a breakeven chart) = Actual level of output – Breakeven level of output

On a break even chart the level of profit at a given level of output is the vertical distance between
the total revenue line and total costs line
...
For example, the modulus of -3 is 3
...
For example, the modulus of -3 is 3
...
A & B

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