Business Flashcards
formulars
What is the formula for calculating profit?
Profit = Total Revenue - Total Costs
True or False: Gross Profit is calculated before deducting operating expenses.
True
Fill in the blank: The formula for calculating Gross Profit is __________.
Gross Profit = Sales Revenue - Cost of Goods Sold
What does the acronym ‘P/E Ratio’ stand for?
Price to Earnings Ratio
What is the formula for calculating the break-even point in units?
Break-even Point (units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
True or False: A higher current ratio indicates better liquidity.
True
What is the formula for calculating Current Ratio?
Current Ratio = Current Assets / Current Liabilities
Define ‘Return on Investment’ (ROI).
ROI = (Net Profit / Cost of Investment) x 100
What is the formula for calculating Market Share?
Market Share = (Company Sales / Total Market Sales) x 100
True or False: A decrease in variable costs will increase the contribution margin.
True
What is the formula for calculating Contribution Margin?
Contribution Margin = Sales Revenue - Variable Costs
Fill in the blank: The formula for calculating Net Profit is __________.
Net Profit = Gross Profit - Operating Expenses - Taxes
What is the formula for calculating Return on Equity (ROE)?
ROE = (Net Income / Shareholder’s Equity) x 100
What does ‘EBIT’ stand for?
Earnings Before Interest and Taxes
True or False: The formula for calculating the quick ratio includes inventory.
False
What is the formula for calculating the Quick Ratio?
Quick Ratio = (Current Assets - Inventory) / Current Liabilities
What is the formula for calculating Total Revenue?
Total Revenue = Price per Unit x Quantity Sold
Fill in the blank: The formula for calculating Operating Profit is __________.
Operating Profit = Gross Profit - Operating Expenses
What does the acronym ‘CAGR’ stand for?
Compound Annual Growth Rate
What is the formula for calculating CAGR?
CAGR = (Ending Value / Beginning Value)^(1/Number of Years) - 1
True or False: Depreciation is a non-cash expense.
True
What is the formula for calculating Depreciation using the straight-line method?
Depreciation Expense = (Cost of Asset - Salvage Value) / Useful Life
What is the formula for calculating the Debt to Equity Ratio?
Debt to Equity Ratio = Total Liabilities / Shareholder’s Equity
Fill in the blank: The formula for calculating Operating Margin is __________.
Operating Margin = Operating Profit / Sales Revenue
What is the formula for calculating Price Elasticity of Demand?
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
True or False: A Price Elasticity of Demand greater than 1 indicates elastic demand.
True
What is the formula for calculating Inventory Turnover Ratio?
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
What does ‘NPV’ stand for?
Net Present Value
What is the formula for calculating NPV?
NPV = (Cash Flows / (1 + r)^t) - Initial Investment
Fill in the blank: The formula for calculating the Return on Sales (ROS) is __________.
ROS = Net Income / Sales Revenue
What is the formula for calculating the Economic Order Quantity (EOQ)?
EOQ = sqrt((2DS)/H), where D = demand, S = ordering cost, H = holding cost
True or False: A higher inventory turnover indicates better inventory management.
True
What is the formula for calculating the Payback Period?
Payback Period = Initial Investment / Annual Cash Inflow
What does the acronym ‘SWOT’ stand for?
Strengths, Weaknesses, Opportunities, Threats
