Business studies formulae 0.0 / 5 ? BusinessFormulaeASAQA Created by: john philipsCreated on: 13-06-18 12:13 Market share formula Market share = (Sales of a product or business/ Total market sales) x 100 1 of 22 Price elasticity of demand Price elasticity of demand = (% Change in quantity demanded / % Change in price 2 of 22 Income elasticity of demand formula Income elasticity of demand = % Change in quantity demanded/ % Change in income 3 of 22 Net cash flow formula Net cash flow = Total inflows – Total outflows 4 of 22 Sales volume formula Sales volume = total number of units sold over a period of time 5 of 22 Sales revenue formula Sales revenue = number of units sold x unit price 6 of 22 Total variable costs formula Total variable costs = number of units sold x variable cost per unit 7 of 22 Total costs formula Total costs = Fixed costs + variable costs 8 of 22 Contribution per unit formula Contribution per unit = Selling price per unit – Variable cost per unit 9 of 22 Total contribution formula Total contribution = Contribution per unit x Number of units sold 10 of 22 Break even formula Break-even = Fixed costs/ Contribution per unit 11 of 22 Variance formula Variance = Actual – Budget 12 of 22 Gross profit formula Gross profit = Sales revenue minus cost of sales 13 of 22 Operating profit formula Operating profit = Gross profit minus overheads 14 of 22 Net profit formula Net profit = Operating Profit +/- finance costs 15 of 22 Gross profit margin Gross profit margin = (Gross profit / Sales revenue) x 100 16 of 22 Operating profit margin Operating profit margin = (Operating profit/ Sales revenue) x 100 17 of 22 Profit for the year (net profit) margin formula Profit for the year (net profit) margin = (Profit for the year / Sales revenue) x 100 18 of 22 Current ratio formula Current ratio = Current assets/ current liabilities 19 of 22 Acid test ratio Acid test ratio = (Current assets – stock) / current liabilities 20 of 22 Labour productivity formula Productivity (labour) = Output per period (units)/ Number of employees in that period 21 of 22 Capacity utilisation Capacity utilisation = (Actual level of output/ Maximum possible output) x 100 22 of 22

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