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)

Question 10

What is the percentage change increase formula?

Answer 10

Increase = new number - original number

%ge increase = increase/original number x 100

Question 11

What is the percentage change decrease formula?

Answer 11

Decrease = original number - new number

%ge decrease = decrease/original number x 100

Question 12

What is the formula for PED?

Answer 12

PED = %ge change in quantity demanded/%ge change in price

Question 13

What is the formula for YED?

Answer 13

YEd = %ge change in quantity demanded/%ge change in income

Question 14

What is the formula for market share?

Answer 14

Market share % = Total sales of a firm/Total sales in a market x 100

Question 15

What is the formula for sales volume?

Answer 15

Sales volume = Sales revenue/Selling price

Question 16

What is the formula for Total Contribution

Answer 16

Total contribution = contribution per unit x number of units sold

Total contribution = sales revenue - total variable costs

Question 17

What is the formula for profit/loss?

Answer 17

Profit = total contribution - fixed costs

Or, profit = total revenue - total costs

Generally, the higher the better, depending on the firms objectives

Question 18

What is the formula for budget variance?

Answer 18

Actual figure - budgeted figure

Question 19

What is the formula for break-even point?

Answer 19

BEP = total revenue = total costs

Question 20

What is the formula for break even output?

Answer 20

Break even output = total fixed costs/contribution per unit

Question 21

What is the margin of safety formula?

Answer 21

Margin of safety = current sales volume/output - break even output

Question 22

What is the gross profit formula?

Answer 22

Gross profit = revenue - total variable costs (cost of sales)

Question 23

What is the operating profit formula?

Answer 23

Operating profit = gross profit - fixed costs/operating expenses (overheads/expenses)

Question 24

What is the net profit (for the year) formula?

Answer 24

Net profit for the year = operating profit +/- interst (finance costs or income)

Question 25

What is the net profit margin formula?

Answer 25

Net profit margin = net profit/revenue x 100

Question 26

What is the net cashflow formula?

Answer 26

Net cash flow = cash inflow - cash outflow

Question 27

What is the formula for productivity?

Answer 27

Labour productivity = output per time period/number of employees at work

Question 28

What is the formula for capacity utilisation?

Answer 28

Capacity utilisation = actual output/maximum possible output x 100

Question 29

What is the total capital employed formula?

Answer 29

Total capital employed = total equity + non-current liabilities

Question 30

What is the gearing ratio formula?

Answer 30

Gearing ratio = non-current liabilities/total capital employed x 100 OR Gearing ratio = non-current liabilities/total equity + non-current liabilities All figures can be found in statement of financial position Low gearing<30% High gearing>60%

Question 31

What is the ROCE % (return on capital employed) formula?

Answer 31

ROCE = operating profit/total capital employed x 100 Operating profit is found on the statement of comprehensive income Total capital employed can be calculated from the statement of financial position

Question 32

What is the absenteeism rate % formula?

Answer 32

Absenteeism rate % = total number of absent per period/average number employed per period x 100

Question 33

What is the formula for labour turnover?

Answer 33

Labour turnover rate % = total number of employees leaving per period/average number of employees per period x 100

Question 34

What is the labour retention rate % formula?

Answer 34

Labour retention rate % = total number of employees remaining per period/average number of employees per period x 100

Question 35

What is the centred moving average 3 month formula?

Answer 35

Centred moving average 3 month = 3 months added together/ 3

Question 36

What is the payback period formula?

Question 37

What is the average rate of return formula?

Question 38

What is the net present value formula?

Question 39

What is the Contribution per unit formula?

Answer 39

Contribution per unit = selling price per unit - variable costs per unit