Calculations

Question 1

Total costs

Answer 1

TC (total cost) = TFC (total fixed costs) + TVC (total variable costs)

Question 1

Revenue

Answer 1

Revenue = price × quantity

Question 2

Break even

Answer 2

Break even point in units = fixed cost÷
(sales price − variable cost)

Break even point in costs / revenue = break even point in units × sales price

Question 3

Margin of safety

Answer 3

Margin of safety = actual or budgeted sales − break even sales

Question 4

Interest (on loans)

Answer 4

Interest (on loans) in % = (total repayment − borrowed amount)÷borrowed amount × 100

Question 5

Net cash-flow

Answer 5

Net cash-flow = cash inflows − cash outflows in a given period

Question 6

Opening and closing balances

Answer 6

Opening balance = closing balance of the previous period

Closing balance = opening balance + net cash-flow

Question 7

Gross profit

Answer 7

Gross profit = sales revenue − cost of sales

Question 8

Gross profit margin

Answer 8

Gross profit margin (%)= (gross profit ÷sales revenue )x100

Question 9

Net profit

Answer 9

Net profit = gross profit − other operating expenses and interest

Question 10

Net profit margin

Answer 10

Net profit margin (%)= (net profit ÷sales revenue) × 100

Question 11

Average rate of return

Answer 11

Average rate of return (%) = average annual profit (total profit / no. of years) ÷ cost of investment x 100