FORMULAS FOR SECTION Unit 3 BTEC Extended Certificate Level 3 1.Sales revenue = Price x Quantity (or Gross profit cost of sales )2.Total Cost = Fixed Cost (total) Variable costs 3.Total Variable costs = variable cost per unit x Quantity 4.Contribution per unit = Price – Variable costs (per unit) 5.Total contribution (using 3) = Contribution per unit x quantity 6.Total contribution (also) = Sales Revenue – total variable costs7.Profit = Sales revenue- total costs 8.Profit (using total contribution) = Total contribution – Fixed Costs 9.Net cash flow = Total inflows (receipts) – Total Outflows (payments)10. Break-even output = Fixed CostPrice – variable cost (per unit) 11.Margin of safety (units) = Actual Output – Break even output12.Margin of safety value = Actual Revenue – Break-even revenue 1.Cost of sales = Opening inventories Purchases – Closing Inventories 2.Gross Profit = Sales – Cost of Goods sold 3.Net profit (profit for the yr) = Gross Profit – Expenses Other income 4.Net current assets = Current assets – current liabilities (Also known as net current assets/liabilities and working capital) 5.Net Assets = Total Assets – Total Liabilities 6.Gross profit margin: = Gross Profit/sales rev x 100%7.Mark-up = Gross Profit /cost of goodsx100% 8.Profit margin = Profit /sales revx100%9.Return on capital employed (ROCE):= Profit before tax and interest/cap employed x 100.Current ratio = Current Assets /Current Liabilities :111.Liquid capital ratio: = Current Assets – Inventories /Current liabilities :112.Trade receivable days= Trade receivables/credit sales x 365 days13. Trade Payable days= Trade Payable/credit purchases x 365 days 14. Inventory turnover=Average Inventory/ cost of goods x 365 days b. Average inventory = Opening inventories Closing Inventory 15.Straight line depreciation = Historic Value - residual value /Expected YRS 16.Reducing balance depreciation = reduce by the % provided 17.Net book Value = Historic cost – Accumulated depreciation Good luck