Sales Revenue — formula?
Price per unit × quantity sold
Market Share (%) — definition?
Business sales divided by total market sales, times 100
Total Costs — components?
Fixed costs + variable costs
Fixed Costs — example?
Rent, salaries, insurance
Variable Costs — example?
Raw materials, direct labor
Gross Profit — formula?
Sales revenue minus cost of sales
Gross Profit Margin (%) — formula?
(Gross profit / Sales revenue) × 100
Operating Profit — formula?
Gross profit minus operating expenses
Operating Profit Margin (%) — formula?
(Operating profit / Sales revenue) × 100
Net Profit — formula?
Operating profit minus interest and tax
Profit Margin Ratios — purpose?
Assess profitability and efficiency
ROCE (%) — formula?
(Operating profit / Capital employed) × 100
Liquidity Ratios — examples?
Current ratio, acid test ratio
Current Ratio — formula?
Current assets / current liabilities
Acid Test Ratio — formula?
(Current assets – inventories) / current liabilities
Gearing Ratio — formula?
(Non-current liabilities / Capital employed) × 100
Contribution per Unit — formula?
Selling price – variable cost per unit
Breakeven Point — formula?
Fixed costs / contribution per unit
Market Share — significance?
Indicates company's market position
Contribution per Unit — role?
Contributes to covering fixed costs and profit
Gearing Ratio — meaning?
Level of financial leverage and risk
Net Profit — importance?
Final measure of profitability after all expenses
Profit Margin Ratios — compare?
Profitability across periods or companies
Liquidity Ratios — assess?
Short-term solvency and ability to pay debts
Teste tes connaissances avec un QCM de 12 questions sur Financial Performance and Market Analysis.
1. What does the calculation of Sales Revenue involve?
2. What is the formula for calculating total costs in production?
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