Revenue Streams
Total Revenue (TR)
TR = Selling Price ร Quantity Sold Average Revenue (AR)
AR = TR / Quantity Cambridge IGCSE 0450 / 0986
๐ข IGCSE Business Studies Formula Sheet 2025
All the Cambridge Business Studies financial and operational calculations you need, organised topic by topic for quick revision.
Finance Marketing Operations HR Analytics
Master the Numbers Behind Business Decisions
Cambridge exams love data-driven questions. Use this formula sheet to calculate costs, profits, ratios, productivity and HR metrics accurately, then pair them with your business analysis for top marks.
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Finance metrics with margin reminders
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Ratio interpretations for Paper 2
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Operations efficiency calculations
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HR and workforce planning formulas
Cost, Revenue & Profit Essentials
State currency and time period when presenting each figure.
Cost Structures
Total Cost (TC)
TC = Fixed Costs + Variable Costs Average Cost (AC)
AC = TC / Quantity Average Fixed Cost (AFC)
AFC = Fixed Costs / Quantity Average Variable Cost (AVC)
AVC = Variable Costs / Quantity Profitability
Profit
Profit = TR โ TC Gross Profit
Gross Profit = Sales Revenue โ Cost of Sales Net Profit
Net Profit = Gross Profit โ Expenses Contribution & Break-even
Contribution per Unit
Contribution = Selling Price โ Variable Cost per unit Total Contribution
Total Contribution = Contribution per unit ร Quantity Break-even Output
Break-even = Fixed Costs / Contribution per unit Margin of Safety
Margin of Safety = Actual Output โ Break-even Output Profitability & Liquidity Ratios
Ratios should be expressed as percentages or ratios depending on syllabus guidance.
Profitability Ratios
Capital Employed = Long-term liabilities + Shareholders' funds.
Gross Profit Margin
Gross Profit Margin = (Gross Profit / Sales Revenue) ร 100% Net Profit Margin
Net Profit Margin = (Net Profit / Sales Revenue) ร 100% Return on Capital Employed (ROCE)
ROCE = (Net Profit / Capital Employed) ร 100% Liquidity Ratios
Aim for 1.5:1 (current ratio) and at least 1:1 (acid test) for exam evaluation.
Current Ratio
Current Ratio = Current Assets / Current Liabilities Acid Test Ratio
Acid Test = (Current Assets โ Inventory) / Current Liabilities Inventory Turnover
Average Inventory = (Opening Inventory + Closing Inventory) / 2.
Inventory Turnover = Cost of Goods Sold / Average Inventory Receivables & Payables Days
Receivables Days
Receivables Days = (Trade Receivables / Credit Sales) ร 365 Payables Days
Payables Days = (Trade Payables / Credit Purchases) ร 365 Marketing Metrics
Market Demand Calculations
Market Size (value)
Market Size = Total Market Sales ร Average Price Market Size (volume)
Market Size = Total units sold in the market Market Share
Market Share = (Firm's Sales / Total Market Sales) ร 100% Pricing Decisions
Mark-up Percentage
Mark-up = ((Selling Price โ Cost) / Cost) ร 100% Margin Percentage
Margin = ((Selling Price โ Cost) / Selling Price) ร 100% Price Elasticity of Demand
PED = (% ฮ in quantity demanded) / (% ฮ in price) Use to predict impact of price changes on revenue.
Average Rate of Return (ARR)
Average Annual Profit = Total profit over project รท number of years.
ARR (%) = (Average Annual Profit / Initial Investment) ร 100 Payback Period
Time taken for cumulative cash inflow to equal initial investment.
No formal formula; subtract annual inflows until investment is recovered, then compute remainder as a proportion of the next year's inflow.
Operations & Human Resource Analytics
Productivity Measures
Labour Productivity
Labour Productivity = Output / Number of Employees Output per Machine
Output per Machine = Total Output / Number of Machines Capacity Utilisation
Capacity Utilisation (%) = (Actual Output / Maximum Possible Output) ร 100 Quality Metrics
Defect Rate
Defect Rate (%) = (Number of Defective Units / Total Units Produced) ร 100 Human Resource Calculations
Labour Turnover
Labour Turnover (%) = (Number of Staff Leaving / Average Number of Staff Employed) ร 100 Absenteeism Rate
Absenteeism (%) = (Number of Days Lost / Total Possible Working Days) ร 100 Labour Cost per Unit
Labour Cost per Unit = Total Labour Cost / Number of Units Produced Working Capital Management
Working Capital
Working Capital = Current Assets โ Current Liabilities Net Cash Flow
Net Cash Flow = Cash Inflow โ Cash Outflow Closing Cash Balance
Closing Balance = Opening Balance + Net Cash Flow How to Use This Formula Sheet
Boost your Cambridge exam confidence with these proven study strategies from our tutoring experts.
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Lay Out Calculations Clearly
Always show formula, substitution and final answer. Label currency and percentage signs to gain method marks even if the final number slips.
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Connect Numbers to Theory
Follow every calculation with a short explanation of what the figure means for the business to score on analysis and evaluation.
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Drill Past Paper Tables
Recreate common exam tables (cash flow, break-even) from memory to improve speed and accuracy under timed conditions.
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Group Formulas by Decision Area
Organise formulas by finance, marketing, operations and HR so you quickly select the right one in scenario-based questions.
Upgrade Your Business Studies Exam Technique
Practice Cambridge-style structured and case study questions with targeted feedback from Tutopiya tutors. We focus on balancing accurate calculations with strong business analysis.
Aligned with Cambridge Assessment International Education IGCSE Business Studies (0450/0986) syllabus content for 2025.
Double-check whether questions require percentages, ratios or raw numbers, and explain what each outcome means for the business context provided.