Discuss What Is Meant by the Derivative Role of a Share

question 87

Essay

Discuss what is meant by the derivative role of a share market.

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Definitions:

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.

Margin of Safety

The difference between actual or projected sales and the break-even point; it measures the amount by which sales can drop before reaching the break-even point.

Profit-Volume Chart

A graphical representation that shows the relationship between a firm's profits and its volume of sales.

Cost-Volume-Profit Chart

A graphical representation that shows the relationship between a company's costs, sales volume, and profits.