unit 1:

 revenue: selling price x quantity sold

 market capitalization: current share price x total number of shares issued

 market share: total sales of business x 100

total sales of industry

 average revenue: (payoff1 x chance) + (payoff2 x chance)

 monetary value: average revenue – cost (initial)

unit 3:

 market share: sales of business x 100

total market sales

 market growth: % change in total size of market

period of time

unit 4:

 labour productivity: output in units per time period

number of employees

 labour turnover: no. of employees leaving in a year x 100

total number of workers

 capacity utilization (%): current output x 100

maximum possible output
 average costs: total costs
output

 total float: latest finish time (given) – duration (given) – earliest starting time (given)

 free float: earliest starting time (of next activity) – duration (given) – earliest starting time (given)

unit 5:

 profit: total sales revenue – total cost

 net cash flow: cash in – cash out
 working capital: current assets – current liabilities
 total revenue: selling price x quantity sold
 total costs: fixed costs + variable costs

 average costs: total cost (of producing product)

number of units produced

 contribution: selling price p/u x variable cost p/u

 breakeven point: fixed costs

contribution p/u

 margin of safety in units: units sold – BEP in units

 margin of safety in revenue: sales – BEP in revenue
 gross profit: revenue – cost of sales
 liquid assets: current assets – inventories

 shareholder’s equity: total value of assets – total value of liabilities

 equity: value of share capital + cumulative retained earnings

 reserves: shareholder’s equity – share capital

 net current assets: current assets – current liabilities

 working capital: current assets – current liabilities

 net realizable value: amount for which existing inventory can be sold – cost of selling it

 straight-line depreciation: original cost of asset – expected residual value

expected useful life of asset (years)

 net book value: original cost – accumulated depreciation

 current ratio: current assets measures the ability of a business to

current liabilities meet its short-term debts

 acid test ratio: current assets – inventory measures the ability of a business to
current liabilities meet its short-term debts

 return on capital employed: operating profit x 100 measures how efficient the assets of a
capital employed business are at generating profit

 capital employed: shareholder’s equity + long term loans OR total assets – current liabilities

 gross profit margin: gross profit x 100

revenue

 profit margin: operating profit x 100

revenue

 operating profit margin: operating profit x 100

revenue

 gearing ratio: non-current liabilities x 100 shows how dependent a business is on money
capital employed borrowed from an external source
 shows the return on an ordinary share from dividends
 dividend yield: dividend per share x 100 in relation to the current market value of the share
market price per share

 dividend cover: profit after tax and interest calculates how many times total dividend could
dividend paid be paid out of company’s profit

 price/earnings ratio: market share price

earnings per share

 earnings per share: profit after tax

number of ordinary shares issued

 accounting rate of return: average annual profit x 100

initial cost of investment

 avg annual profit: sum of all positive net cash flows – cost
total number of years

 net present value: sum of all present values of expected returns – initial cost

 variance analysis: actual figure – budgeted figure