Business & Commerce

Pricing, sales, inventory and growth metrics used to run and scale a commercial business

Business & Commerce formulas cover the key calculations behind pricing, sales, inventory, profitability, and customer growth, from markup and discounts to break-even analysis, EOQ, CAC, and CLV. They’re useful for students studying business maths, exam prep, and anyone working in sales, retail, finance, or operations, because these formulas turn everyday commercial decisions into clear, measurable answers that help businesses grow and stay profitable.

Selling Price from Markup

SP = Cost \times (1 + m)

The price to charge after adding a percentage markup to unit cost.

Discounted Price

P = List \times (1 - d)

The final price after applying a percentage discount to the list price.

Sales Tax

Total = Price \times (1 + t)

The amount payable once a sales-tax or VAT rate is added to the price.

Revenue

Revenue = Price \times Quantity

Total income from sales before any costs are deducted.

Contribution Margin

CM = Price - Variable\ Cost

The amount each unit sold contributes toward covering fixed costs and profit.

Contribution Margin Ratio

CMR = \dfrac{Price - Variable\ Cost}{Price}

Contribution margin expressed as a fraction of the selling price.

Break-Even (Units)

Q = \dfrac{Fixed\ Costs}{Price - Variable\ Cost}

The number of units that must be sold to exactly cover all costs.

Margin of Safety

MoS = \dfrac{Sales - Break\text{-}even}{Sales}\times 100\%

How far sales can fall before the business hits its break-even point.

Economic Order Quantity (EOQ)

EOQ = \sqrt{\dfrac{2DS}{H}}

The order size that minimizes total inventory ordering and holding costs.

Customer Acquisition Cost (CAC)

CAC = \dfrac{Sales\ \&\ Marketing\ Cost}{New\ Customers}

The average cost to win one new customer.

Customer Lifetime Value (CLV)

CLV = \dfrac{ARPU \times Gross\ Margin}{Churn\ Rate}

The total profit expected from a customer over the whole relationship.

Churn Rate

Churn = \dfrac{Customers\ Lost}{Customers\ at\ Start}\times 100\%

The percentage of customers who stop buying over a period.

Conversion Rate

CR = \dfrac{Conversions}{Visitors}\times 100\%

The share of visitors or leads that take the desired action.

Month-over-Month Growth

g = \left(\dfrac{V_1}{V_0}\right) - 1

The percentage change in a metric from one period to the next.