Business formulas

Question 0

Gross profit margin

Answer 0

Gross profit / turnover x100

Question 1

Gross profit

Answer 1

Revenue - Cost of sales

Question 2

Operating profit

Answer 2

Sales revenue - Total costs

Question 3

Operating profit margain

Answer 3

Operating profit / Total revenue x100

Question 4

Profit for the year

Answer 4

Operating profit - All costs

Question 5

Contribution per unit

Answer 5

Selling price - Variable costs per unit

Question 6

Total contribution

Answer 6

Contribution per unit x Quantity

Total revenue - total variable costs

Question 7

Breakeven

Answer 7

Fixed costs / Contribution per unit

Question 8

Margin of safety

Answer 8

Actual output - Breakeven point

Question 9

Profit

Answer 9

Total revenue - total costs

Question 10

Sales growth

Answer 10

Sales this year - Sales last year / Sales last year x100

Question 11

Market growth

Answer 11

New market size - Old market size / Old market size x100

Question 12

Market share

Answer 12

Sales of a product / Total sales in market x100

Question 13

Price elasticity of demand

Answer 13

% change in quantity demand / % change in price

Question 14

Income elasticity of demand

Answer 14

% change in quantity demand / % change in income

Question 15

Labour costs per unit of output

Answer 15

Total labour costs / Total output x100

Question 16

Absenteeism

Answer 16

Number of staff absent during a certain period of time / number employed during certain period of time x100

OR

Number of days taken off with unauthorised absence during a certain period / Total days worked by workforce over the certain period of time x100

Question 17

Unit cost

Answer 17

Total cost / Units output

Question 18

Fixed costs

Answer 18

Total costs - Variable costs

Question 19

Total costs

Answer 19

Fixed costs + Variable costs

Question 20

Labour productivity

Answer 20

Output / Number of employees at work

Question 21

Capacity utilisation

Answer 21

Output / Capacity x100

Question 22

Labour turnover

Answer 22

Number of leavers per year / Average number of employees per year x100

Question 23

Labour renention

Answer 23

Number of employees with one or more years service / Overall workforce x100

Question 24

Output per employee

Answer 24

Output period (units) / Number of employees at work

Question 25

Net cash flow

Answer 25

Inflows - Outflows

Question 26

Opening balance

Answer 26

Last month’s closing balance

Question 27

Closing balance

Answer 27

Opening balance + Net cash flow

Question 28

ROCE

Answer 28

Operating profit / (Total equity + Non-current liability)

Question 29

Current ratio

Answer 29

Current assets / Current liabilities

Question 30

Gross profit margin

Answer 30

Gross profit / Sales revenue x100

Question 31

Operating profit margin

Answer 31

Operating profit / Sales revenue x100

Question 32

Working capital

Answer 32

Current assets - current liabilities

Question 33

Net assets

Answer 33

Net current assets + non-current assets - non-current liabilities

Question 34

Net current assets

Answer 34

Current assets - current liabilities

Question 35

Labour cost per unit

Answer 35

Labour costs / Units of output

Question 36

Break-even level in sales revenue

Answer 36

Break-even output x selling price

Question 37

Market capitilisation

Answer 37

Number of issued shares x share price

Question 38

ARR

Answer 38

Average net return / Investment x100

Question 39

Payback

Answer 39

Amount invested / Annual net return

Question 40

Net gain

Answer 40

Expected value - Initial cost of decision

Question 41

Inventory turnover

Answer 41

Cost of goods sold / Average inventories held