Calculations/Formulas

Question 1

What is the Total Costs formula?

Answer 1

Total costs = fixed costs - variable costs

Question 2

What is the sales revenue formula?

Answer 2

Sales revenue = selling price x sales volume

Question 3

What is the gross profit margin formula?

Answer 3

Gross profit margin = Gross profit/Revenue x 100

Question 4

What is the operating profit margin formula?

Answer 4

Operating profit margin = Operating profit/Revenue x 100

Question 5

What is the Profit of the year margin formula?

Answer 5

Profit of the year margin = Profit of the year/Revenue

Question 6

What is the Acid test ratio formula?

Answer 6

Acid test ratio = Current assets - inventory/Current liabilities

Question 7

What is the working capital formula?

Answer 7

Working capital = Current assets - current liabilities

Question 8

What is the Current ratio formula?

Answer 8

Curent ratio = Current assets/current liabilities

Question 9

What is a Working capital cycle?

Answer 9

CASH - Production costs - Finished stock - Sales (Receivables)