business equations

Question 1

how to work out total costs

Answer 1

total fixed costs + total variable costs = total costs

Question 2

how to work out revenue

Answer 2

price X quantity = revenue

Question 3

how to work out break even point units

Answer 3

fixed costs ÷ (sales price - variable cost) = break even point units

Question 4

how to work out margin of saftey

Answer 4

sales - break even sales = margin of saftey

Question 5

how to work out intrest on loans

Answer 5

(total repayment - borrowed amount) ÷ borrowed amount
X100 = intrest

Question 6

how to work out net cash flow

Answer 6

cash inflows - cash outflows = net cash flow

Question 7

how to work out opening balance

Answer 7

closing balance of previous period = opening balance

Question 8

how to work out closing balance

Answer 8

opening balance + net cash flow = closing balance

Question 9

how to work out gross profit

Answer 9

sales revenue - cost of sales

Question 10

how to work out gross profit margin

Answer 10

gross profit ÷ sales revenue X 100= net profit margin (%)

Question 11

how to work out average rate of return

Answer 11

average annual profit ÷ cost of investment X 100 = average rate of return

Question 12

how to work out average annual profit

Answer 12

total profit ÷ number of years = average annual profit