Working capital = current assets - current liabilities
Total revenue = price per unit x quantity sold
Profit = revenue - costs
Total costs = total fixed costs + total variable costs
𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠
Break even level of output =
𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡
𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠 + 𝑡𝑎𝑟𝑔𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡
Target profit level of output =
𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡
𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠
Break even revenue =
1− (𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡 / 𝑝𝑟𝑖𝑐𝑒)
𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡𝑠𝑡
Break even target price = + direct costs
𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑙𝑒𝑣𝑒𝑙
Gross profit = sales revenue - cost of sales
Net / operating profit = gross profit - overhead expenses
Profit after tax & interests = operating profit - (tax + interests)
𝑟𝑒𝑣𝑒𝑛𝑢𝑒 − 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑
Gross profit margin =
𝑟𝑒𝑣𝑒𝑛𝑢𝑒
Shareholders equity = total value of assets - total value of liabilities
Assets = liabilities + equity
Equity = share capital + retained profit
Net assets = equity
Total assets less current liabilities = (fixed assets + current assets) - current liabilities
Total assets less current liabilities = fixed assets + working capital
Net assets = (total assets less current liabilities) - long term liabilities
𝑜𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 − 𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒
Annual depreciation =
𝑒𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑢𝑠𝑒𝑓𝑢𝑙 𝑙𝑖𝑓𝑒 𝑜𝑓 𝑎𝑠𝑠𝑒𝑡
Net book value in year 1 = cost of original asset - (cost of original asset x rate of depreciation)
𝑔𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡
Gross profit margin = x 100
𝑠𝑎𝑙𝑒𝑠 𝑟𝑒𝑣𝑒𝑛𝑢𝑒
𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡
Net profit margin = x 100
𝑠𝑎𝑙𝑒𝑠 𝑟𝑒𝑣𝑒𝑛𝑢𝑒
Capital employed = (non current assets + current assets) -current liabilities
Capital employed = non current liabilities + shareholders equity
𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡
Return on capital employed = 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑
x 100
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
Current ratio =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑠𝑡𝑜𝑐𝑘
Acid test ratio =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
