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This chapter covers the concepts of private, public, and global enterprises in business studies, emphasizing their importance in the economy.
Private, Public and Global Enterprises – Formula & Equation Sheet
Essential formulas and equations from Business Studies, tailored for Class 11 in Business Studies.
This one-pager compiles key formulas and equations from the Private, Public and Global Enterprises chapter of Business Studies. Ideal for exam prep, quick reference, and solving time-bound numerical problems accurately.
Key concepts & formulas
Essential formulas, key terms, and important concepts for quick reference and revision.
Formulas
P = TR - TC
P represents Profit, TR is Total Revenue, and TC is Total Cost. This formula is used to determine the profitability of an enterprise.
TR = Price × Quantity
TR is Total Revenue, Price is the selling price per unit, and Quantity is the number of units sold. This helps in calculating revenue generated by sales.
TC = FC + VC
TC is Total Cost, FC is Fixed Costs, and VC is Variable Costs. It helps in understanding overall costs incurred by an enterprise.
MC = ΔTC / ΔQ
MC is Marginal Cost, ΔTC is the change in Total Cost, and ΔQ is the change in Quantity. It's useful for analyzing the cost implications of producing additional units.
Average Cost (AC) = TC / Q
AC represents Average Cost, TC is Total Cost, and Q is Quantity produced. This formula provides insights into cost efficiency.
ROI = (Net Profit / Cost of Investment) × 100
ROI represents Return on Investment, Net Profit is the profit earned, and Cost of Investment is the total cost of investment. It gauges profitability relative to the investment made.
V = I × R
According to Ohm's Law, V represents Voltage (Volts), I is Current (Amperes), and R is Resistance (Ohms). This may be relevant in contexts of public sector utilities.
E = C × F
E represents Earnings, C is Capital employed, and F is the Rate of Return. This helps to analyze the return generated on capital investments in enterprises.
Market Share (%) = (Company Sales / Total Market Sales) × 100
Market Share indicates the percentage of an industry's sales that a particular company controls. It helps assess the competitive position in the market.
GDP = C + I + G + (X - M)
GDP is Gross Domestic Product, C is Consumption, I is Investment, G is Government Spending, X is Exports, and M is Imports. This formula gives an overall economic performance of the public sector.
Equations
Disinvestment = Total Equity Sold / Total Shares
This equation calculates the extent of disinvestment by measuring the proportion of equity sold relative to the total shares issued.
PBT = Revenue - Expenses
PBT is Profit Before Tax, Revenue is the total income generated, and Expenses are the costs incurred. This aids in assessing operational profitability.
Working Capital = Current Assets - Current Liabilities
This equation helps businesses understand their short-term financial health and operational efficiency by evaluating liquidity.
Fair Market Value = (Estimated Cash Flows / (1 + Discount Rate)^n)
This equation is useful for valuing enterprises during acquisitions or mergers, where CF is the projected cash flows, n is the number of periods, and r is the discount rate.
Net Profit Margin = (Net Profit / Revenue) × 100
This equation determines the profitability of a company by showing what percentage of revenue is retained as profit after expenses.
Gearing Ratio = (Debt Capital / Equity Capital) × 100
This equation indicates the relative proportion of debt and equity used to finance a company's activities, highlighting financial risk.
Equity Ratio = (Total Equity / Total Assets) × 100
This shows the proportion of a company's assets that are financed by shareholders' equity, serving as an indicator of financial leverage.
Current Ratio = Current Assets / Current Liabilities
This provides an insight into the company's short-term liquidity, assessing whether it can cover its short-term obligations.
Debt to Equity Ratio = Total Liabilities / Shareholder's Equity
This equation assesses a company's financial leverage and risk profile by comparing its total liabilities to shareholders' equity.
Profitability Index = Present Value of Future Cash Flows / Cost of Investment
This calculates the profitability of investments by comparing the value generated by a project to the cost incurred.
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