AS Level Business CAIE — All Important Numericals and Formulae

1. Revenue, Cost and Profit

Total Revenue = Price × Quantity Sold

Average Revenue = Total Revenue ÷ Quantity Sold

Total Cost = Fixed Costs + Variable Costs

Variable Cost Total = Variable Cost Per Unit × Output

Average Cost = Total Cost ÷ Output

Average Fixed Cost = Fixed Costs ÷ Output

Average Variable Cost = Variable Costs ÷ Output

Profit = Total Revenue − Total Cost

Gross Profit = Revenue − Cost of Sales

Net Profit = Gross Profit − Expenses

Operating Profit = Revenue − Operating Expenses

Profit Margin (%) = (Profit ÷ Revenue) × 100

Gross Profit Margin (%) = (Gross Profit ÷ Revenue) × 100

Net Profit Margin (%) = (Net Profit ÷ Revenue) × 100

2. Break-even Analysis

Contribution Per Unit = Selling Price − Variable Cost Per Unit

Total Contribution = Total Revenue − Total Variable Costs

Break-even Output = Fixed Costs ÷ Contribution Per Unit

Break-even Revenue = Break-even Output × Selling Price

Margin of Safety = Actual Sales − Break-even Sales

Margin of Safety (%) = (Margin of Safety ÷ Actual Sales) × 100

Target Profit Output = (Fixed Costs + Target Profit) ÷ Contribution Per Unit

3. Inventory / Stock Control

Inventory Turnover = Cost of Sales ÷ Average Inventory

Average Inventory = (Opening Inventory + Closing Inventory) ÷ 2

Days Inventory Held = (Average Inventory ÷ Cost of Sales) × 365

4. Liquidity Ratios

Current Ratio = Current Assets ÷ Current Liabilities

Acid Test Ratio = (Current Assets − Inventory) ÷ Current Liabilities

5. Efficiency Ratios

Trade Receivables Days = (Trade Receivables ÷ Credit Sales Revenue) × 365

Trade Payables Days = (Trade Payables ÷ Credit Purchases) × 365

6. Profitability Ratios

Return on Capital Employed (ROCE) (%) = (Operating Profit ÷ Capital Employed) × 100

Return on Equity (%) = (Net Profit ÷ Shareholders’ Equity) × 100

7. Gearing Ratio

Gearing (%) = (Non-current Liabilities ÷ Capital Employed) × 100

8. Investment Appraisal

Payback Period = Initial Cost ÷ Annual Net Cash Inflow

Average Rate of Return (ARR) (%) = (Average Annual Profit ÷ Initial Investment) × 100

Net Cash Flow = Cash Inflows − Cash Outflows

9. Workforce and Labour

Labour Productivity = Total Output ÷ Number of Employees

Unit Labour Cost = Total Labour Cost ÷ Output

Absenteeism Rate (%) = (Days Lost Through Absence ÷ Total Working Days) × 100

Labour Turnover (%) = (Number Leaving During Year ÷ Average Number Employed) × 100

10. Market Share and Growth

Market Share (%) = (Business Sales ÷ Total Market Sales) × 100

Percentage Change (%) = ((New Value − Old Value) ÷ Old Value) × 100

Sales Growth (%) = ((Current Year Sales − Previous Year Sales) ÷ Previous Year Sales) × 100

11. Capacity Utilisation

Capacity Utilisation (%) = (Actual Output ÷ Maximum Possible Output) × 100

12. Added Value

Added Value = Selling Price − Cost of Bought-in Materials and Components

13. Financial Terms

Capital Employed = Non-current Liabilities + Shareholders’ Equity

Working Capital = Current Assets − Current Liabilities

Closing Balance = Opening Balance + Receipts − Payments

14. Marketing Numericals

Price Elasticity of Demand (PED) = Percentage Change in Quantity Demanded ÷ Percentage Change in Price

Income Elasticity of Demand (YED) = Percentage Change in Demand ÷ Percentage Change in Income

15. Forecasting

Moving Average = Total of Selected Data Values ÷ Number of Values

Mean Average = Total Value ÷ Number of Items

16. Exchange Rate Calculations

Foreign Currency Received = Home Currency ÷ Exchange Rate

Home Currency Received = Foreign Currency × Exchange Rate

17. Interest Formulae

Simple Interest = (Principal × Rate × Time) ÷ 100

Amount After Interest = Principal + Interest

18. Contribution and Special Orders

Contribution = Sales Revenue − Variable Costs

If Contribution > 0, special order may help cover fixed costs.

19. CPA / Decision Tree Basics

Expected Value = Probability × Outcome

Total Expected Value = Sum of All Expected Values

20. Common Percentage Formulae

Percentage = (Part ÷ Whole) × 100

Percentage Increase = ((Increase ÷ Original Value) × 100)

Percentage Decrease = ((Decrease ÷ Original Value) × 100)

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.