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Business Math

The document outlines key concepts in business math, including mark-up, mark-down, margins, profit, loss, and breakeven analysis. It explains how to compute profit and loss, as well as the difference between fixed and variable costs. Understanding these concepts is essential for managing a business's financial health and ensuring profitability.

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patricioachelis
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5 views2 pages

Business Math

The document outlines key concepts in business math, including mark-up, mark-down, margins, profit, loss, and breakeven analysis. It explains how to compute profit and loss, as well as the difference between fixed and variable costs. Understanding these concepts is essential for managing a business's financial health and ensuring profitability.

Uploaded by

patricioachelis
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

BUSINESS MATH

Mark-Up, Mark-Down, Mark- On, and Margins

Mark-Up – the added amount to the cost to determine the selling price.
S = C + Mup
Mark-On – computed mark-up based on cost.
Mo = (Rmo) (c)
Margin – computed mark-up based on selling price.
Mm = (Rmo) (s)
Mark-Down – the difference between the old selling price and new selling price.
Md = So – Sn
Price – among the mix of factors that affect a business’s relationship with customers.

Profit and Loss

To increase their profit, companies increase their sales and reduce their cost.
Profit or Loss – whether total sales are enough to cover all payables and other expenses.
Profit – when an amount is left after costs and expenses are deducted.
- can lead to a business growth.
Loss- when there is not enough money to cover all expenses.
- can cease the operation of a business.
How to compute profit:
P=R–C
How to compute profit percentage:
P% = (P/C) 100%

How to compute loss:


L=C–R
How to compute loss percentage:
L% = (L/C) 100%

Breakeven

-Most business firms sells something.


-The amount of money the firm receives for the sale of goods or payment of services they
render is called REVENUE.
-The amount of money the firm pays for production or the expenses they spent for the product
they offer is called COST.
-The difference between revenue and cost is called PROFIT.
PROFIT = REVENUE – COST

General formula – P(x) = R(x) – C(x)


Cost

Fixed Cost – necessary expenditures that remain the same no matter how much of the product
is manufactured or sold.
Variable Cost – it change directly with the amount of product produced or sold.

Cost Function
C(x) = V(x) + FC(x)

Breakeven Function
R(x) = C(x)

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