FORMULA SHELF
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The arithmetic behind the work: what to measure, what to type in, and what the answer comes out as. Every formula says what the symbols mean and gives a worked example, so you can check it against a job you have already done.
SHELVES
Money
8 formulas
Before you buy pigs, take on a shed, or start selling eggs. If the margin per unit is negative, the answer is no, however many units you sell.
Fixed costs 2,400 a year, eggs at 40p with 20p of cost: 2,400 / 0.20 = 12,000 eggs a year, or 33 a day.
Margin is measured against the selling price, markup against the cost. They are not the same number and confusing them is how people lose money. A 50% markup is a 33% margin.
Bought at 2 and sold at 3: a 50% markup, a 33% margin.
Convenience only. Double-check the result against the worked example or a second method before you use it.
How long before the machine pays for itself. A payback under three years is usually good for a working tool.
Cost 9,000, nets 1,800 a year: 5 years to pay back.
For a flock, a herd, a customer list or a tree that is being improved each year. Shows the real rate behind a rising number.
20 sheep to 50 in 5 years: (2.5^(1/5) - 1) = 20.1% a year.
Convenience only. Double-check the result against the worked example or a second method before you use it.
The only way to compare two crops, or two fields, fairly. Divide the whole year's cost by the area, not just the variable bits.
12,000 of costs over 8 hectares = 1,500 a hectare.
Convenience only. Double-check the result against the worked example or a second method before you use it.
The number that decides what you plant next year. Always leave the fixed costs out of this figure and add them back at the whole-farm level, or you will chase the wrong crop.
6 t/ha at 180 a tonne = 1,080, less 480 of variable cost = 600 a hectare.
Working out whether a bulk buy of feed, fuel or seed is cheaper than the retail price, including the delivery.
600 for 1,500 kg of feed = 40 a 100 kg bag equivalent.
Compare a new freezer, a new shed or a flock of sheep against what they actually return each year.
Cost 4,000, returns 1,600 a year in extra sales: 40% a year.
Convenience only. Double-check the result against the worked example or a second method before you use it.
SOURCES & PROVENANCE
1 listed
This page is an AI-organised index. The label means the grouping and cross-links were compiled with AI; the information itself comes from the public-domain books, reports and manuals listed below. Open any source to read the local copy or follow the link to the original publication.