Calculations

Question 1

Percentage change?

Answer 1

(change/original) x 100

Question 2

Index number

Answer 2

Index numbers are set to show percentage change compared to a base year, which is set to 100.

Question 3

Market share?

Answer 3

(Sales of a product or business/Total market sales) x 100

Question 4

Price elasticity of demand?

Answer 4

% Change in quantity demanded/ % Change in price

Question 5

Income elasticity of demand?

Answer 5

% Change in quantity demanded/ % Change in income

Question 6

Net cash flow?

Answer 6

Total inflows - total outflows

Question 7

Sales volume?

Answer 7

total number of units sold over a period of time

Question 8

Sales revenue?

Answer 8

Number of units sold x unit price

Question 9

Total variable costs?

Answer 9

number of units sold x variable costs per unit

Question 10

Total costs?

Answer 10

fixed costs + variable costs

Question 11

Contribution per unit?

Answer 11

selling price per unit - variable cost per unit

Question 12

Total contribution?

Answer 12

contribution per unit x number of units (or sales revenue - total variable costs)

Question 13

Break even?

Answer 13

fixed costs/contribution per unit

Question 14

Margin of safety?

Answer 14

expected sales - break even level of output

Question 15

Variance

Answer 15

actual - budget

Question 16

Gross profit

Answer 16

sales revenue minus variable costs

Question 17

Operating profit

Answer 17

gross profit minus fixed costs (overheads)

Question 18

Net profit

Answer 18

Operating profit +/- finance costs and tax

Question 19

Gross profit margin?

Answer 19

(Gross profit/sales revenue) x 100

Question 20

Operating profit margin?

Answer 20

(Operating profit/sales revenue) x 100

Question 21

Net profit margin (profit for the year)?

Answer 21

(Net profit/sales revenue) x 100

Question 22

Current ratio

Answer 22

current assets/current liabilities

Question 23

Acid test ratio

Answer 23

(current assets - inventories) / current liabilities

Question 24

Productivity (labour)

Answer 24

output per period (units)/number of employees in that period

Question 25

Capacity utilisation

Answer 25

(actual level of output/maximum possible output) x 100

Question 26

Exchange rates

Answer 26

Pound into other currency = Amount (£) x exchange rate

Another currency into pounds = Amount / exchange rate

Question 27

Payback (exact week)

Answer 27

(Amount still to pay back(outlay) / net cash flow for the year of payback) x 52

Question 28

Average rate of return

Answer 28

(Total net return for the project/years of project) / initial investment

Question 29

Net present value

Answer 29

Sum of annual net cash flows x discount factor for each respective year (minus initial investment)

Question 30

Earliest start time

Answer 30

EST of previous activity + duration of previous activity

Question 31

Latest finish time

Answer 31

LFT of last project - duration of last project

Question 32

Float time on each activity

Answer 32

LFT - duration - EST

Question 33

Gearing ratio

Answer 33

Non-current liabilities/Capital employed (which is total equity + non-current liabilities)

Question 34

Return on capital employed?

Answer 34

(Operating profit/Capital employed) x 100

Question 35

Labour turnover

Answer 35

(number of employees leaving over a period/total number of employees) x 100

Question 36

Labour retention

Answer 36

(number of employees remaining over a period / total number of employees) x 100

Question 37

absenteeism rate

Answer 37

(Total number of days missed through absence over a period / total number of possible working days) x 100