calculation mistakes ! Flashcards
What is the formula for the Acid Test Ratio?
“(Current Assets - Inventory) / Current Liabilities”
How do you calculate the Net Profit Margin?
“(Net Profit / Revenue) × 100”
What is the correct method for calculating Percentage Change?
”[(New Value - Old Value) / Old Value] × 100”
What should you subtract when calculating Contribution per Unit?
“Subtract the variable costs from the selling price to find the contribution per unit.”
How do you calculate the correct Gross Profit Margin?
“(Gross Profit / Revenue) × 100”
What is the difference between Gross Profit and Operating Profit?
“Gross profit is sales revenue minus the cost of goods sold
What does the Acid Test Ratio tell you about a business?
“It measures a company’s ability to cover its short-term liabilities with its most liquid assets.”
What is the formula for calculating Labour Productivity?
“Output / Number of Workers”
What is Labour Efficiency?
“It measures the relationship between the output produced and the number of labour hours worked.”
How should you calculate the percentage growth difference correctly?
“Use the formula: [(New Value - Old Value) / Old Value] × 100
