All Equations Year 1 and 2

Question 1

Revenue

Answer 1

Selling Price x Quantity

Question 2

Total Costs

Answer 2

Fixed costs + Variable Costs

Question 3

Profit

Answer 3

Total revenue - Total costs

Question 4

Net Profit

Answer 4

Gross Profit - Total expenses

Question 5

Net Profit Margin (NPM)

Answer 5

Net Profit/Revenue x100

Question 6

Cost of Sales

Answer 6

(opening stock + purchases) – closing stock

Question 7

Gross Profit

Answer 7

Total Revenue - Cost of Goods Sold

Question 8

Gross Profit Margin (GPM)

Answer 8

Gross Profit/Revenue x 100

Question 9

Absenteeism Rate

Answer 9

Total number of staff absence days over a year/ Total number of working days that should have been worked x 100

Question 10

Labour Turnover

Answer 10

Number of staff leaving / Average number of staff employed x 100

Question 11

Labour Productivity

Answer 11

Output (per period) / Number of employees (per period)

Question 12

Added Value

Answer 12

Output (Finish Product’s price) - Inputs (costs of producing one product)

Question 13

Capital Productivity

Answer 13

Output / Capital Employed

Question 14

Capacity Utilisation

Answer 14

Actual Output / Maximum Output

Question 15

Break-Even Output

Answer 15

Fixed Costs / Contribution per Unit

Question 16

Net Assets

Answer 16

(Total Fixed Assets + Total Current Assets) – (Total Current Liabilities + Total Non-Current Liabilities)

Question 17

Shareholder’s Funds

Answer 17

Total Assets - Total Liabilities

Question 18

Working Capital

Answer 18

Current Assets - Current Liabilities

Question 19

Current Ratio

Answer 19

Current Assets / Current Liabilities

Question 20

Acid Test Ratio

Answer 20

Current Assets - Stock / Current Liabilities

Question 21

Capital Employed

Answer 21

Long Term Liabilities + Shareholders’ Fund (also called equity)

Question 22

Gearing Ratio

Answer 22

Long Term Liabilities (non-current liabilities) / Capital Employed x 100

Question 23

Return on Capital Employed (ROCE)

Answer 23

Net Profit Before Tax / Shareholders’ Funds + Long Term Liabilities x 100

Question 24

Depreciation

Answer 24

Historic Cost – Depreciation = Net Book Value

Question 25

Contribution per Unit

Answer 25

Selling Price per Unit - Variable Cost per unit

Question 26

Total Contribution

Answer 26

Contribution per Unit x Quantity Sold

Question 27

PED (Price Elasticity of Demand)

Answer 27

% Change in Demand / % Change in Price

Question 28

YED (Income Elasticity of Demand)

Answer 28

% Change in Demand / % Change in Income