3.5 business equations

Front

Return on investment (ROI) =

Back

Operating profit (return) / capital invested x 100

Front

profit =

Back

revenue - total costs

Front

gross profit =

Back

sales revenue -cost of sales

Front

operating profit =

Back

gross profit - expenses

Front

profit of the year =

Back

operating profit - interest and taxation

Front

sales revenue =

Back

quantity sold x selling price

Front

closing balance =

Back

opening + net cash flow

Front

contribution per unit =

Back

selling price - variable cost per unit

Front

breakeven point =

Back

fixed cost/ contribution per unit

Front

margin of safety =

Back

actual output -break even output