Total revenue — formula?
Price multiplied by quantity sold.
Break-even point — units?
Fixed costs divided by contribution margin per unit.
Interest rate — calculation?
(Total repayment minus borrowed amount) divided by borrowed amount, times 100.
Cash flow — net?
Cash inflows minus cash outflows.
Profit margin — formula?
Profit divided by revenue, times 100.
Total costs — components?
Fixed costs plus variable costs.
Margin of safety — definition?
Actual or budgeted sales minus break-even sales.
Gross profit — calculation?
Sales minus cost of sales.
Closing balance — formula?
Previous closing balance plus net cash flow.
Profitability margin — purpose?
Measures business efficiency and investment return.
Test your knowledge with 4 questions on Financial Analysis and Cost Management.
1. What does the term 'Revenue' mean in business calculations?
2. How would a manager use the margin of safety to assess the risk of a new sales target?
Review the complete course in the revision sheet for Financial Analysis and Cost Management.
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