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    Business IGCSE-0450 Needed Formulas

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    dinishiappuhamy
    This document defines and explains key financial ratios and concepts used to analyze businesses, including gross profit, net profit, capital, working capital, return on capital employed, current ratio, quick acid test ratio, break-even point, contribution, and shareholders' wealth. These metrics help measure performance, financial position, profitability, liquidity, and capital structure.

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    Business IGCSE-0450 Needed Formulas

    Uploaded by

    dinishiappuhamy
    337 views2 pages
    This document defines and explains key financial ratios and concepts used to analyze businesses, including gross profit, net profit, capital, working capital, return on capital employed, current ratio, quick acid test ratio, break-even point, contribution, and shareholders' wealth. These metrics help measure performance, financial position, profitability, liquidity, and capital structure.

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    Business IGCSE-0450 needed formulas

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    This document defines and explains key financial ratios and concepts used to analyze businesses, including gross profit, net profit, capital, working capital, return on capital employed, current ratio, quick acid test ratio, break-even point, contribution, and shareholders' wealth. These metrics help measure performance, financial position, profitability, liquidity, and capital structure.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    337 views2 pages

    Business IGCSE-0450 Needed Formulas

    Uploaded by

    dinishiappuhamy
    This document defines and explains key financial ratios and concepts used to analyze businesses, including gross profit, net profit, capital, working capital, return on capital employed, current ratio, quick acid test ratio, break-even point, contribution, and shareholders' wealth. These metrics help measure performance, financial position, profitability, liquidity, and capital structure.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Gross Profit = Sales - Cost of goods sold

    Net Profit = Gross Profit - Expenses + income

    Capital = Assets - Liabilities

    Net Assets = Capital Employed

    Gross Profit Margin = (Gross Profit /Sales) x100

    Net Profit Margin = (Net Profit / Sales ) x 100

    Return on Capital employed = (Profit / Capital Employed) x 100

    Current Ratio: Current Assets / Current Liabilities

    Quick Acid Test ratio: (Current Assets - Stock ) / Current Liabilities

    Working capital = Current assets - Current liabilities

    Net assets = Fixed assets + Working capital

    Capital employed = Shareholders' funds + long-term liabilities


    Break-even point = Total fixed costs/Contribution

    Contribution = Selling Price - Variable Costs

    Total costs = fixed + variable costs

    Shareholders' wealth = Total assets - total liabilities

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