Equations

Question 1

Equation for profit

Answer 1

Sales revenue-total costs

Question 2

Definition of gross profit

Answer 2

Revenue-cost of sales

Question 3

Definition of net current assets

Answer 3

Current assets-current liabilities

Question 4

Equation for closing balance

Answer 4

Opening balance+ cash inflows- cash outflows

Question 5

Equation cash available

Answer 5

Opening balance+ total inflows

Question 6

Equation for break even point

Answer 6

Fixed costs/ contribution per unit

Question 7

Equation for contribution per unit

Answer 7

Selling price- variable costs per unit

Question 8

Equation for total contribution

Answer 8

Contribution per units x number of unit sold

Question 9

Equation for total variable cost

Answer 9

Variable cost per unit x quantity

Question 10

Equation for margin of safety

Answer 10

Actual sales in units- break even level of output

Question 11

Equation for costs of good sold

Answer 11

Opening inventories+ purchases- closing inventories

Question 12

Equation of profit or loss of the year

Answer 12

Gross profit- expenses+ other income

Question 13

Equation of straight line

Answer 13

Historic value- residual value/expected life

Question 14

Equation for none current assets

Answer 14

Intangible or tangible+ current assets- current liabilities

Question 15

Equation for capital employed

Answer 15

Retained profit- drawings

Question 16

Equation for gross profit margin

Answer 16

Gross profit/revenue x 100

Question 17

Equation for mark up

Answer 17

Gross profit/ cost of sales x 100

Question 18

Equation for net profit margin

Answer 18

Net profit/ revenue x 100

Question 19

Equation on return on capital employed

Answer 19

Net profit before interest and tax/ capital employed x100

Question 20

Equation for current ratio

Answer 20

Current assets/current liabilities

Question 21

Equation for liquid capital ratio

Answer 21

Current assets- inventory/ current liabilities

Question 22

Equation for trade receivables days

Answer 22

Trade receivables/credit Sales x 365

Question 23

Equation for trade payable days

Answer 23

Trade payables/ credit purchases x365

Question 24

Equation for inventory turnover

Answer 24

Average inventory/ cost of sales x365

Question 25

Equation for average inventory

Answer 25

Opening inventory+ closing inventory/2

Question 26

Equations for months to break even

Answer 26

Break even units/ units produced per month

Question 27

Equation for total revenue

Answer 27

Quantity sold x selling price

Question 28

Equation for sales in value

Answer 28

Quantity sold x selling price per unit

Question 29

Equation for net assets

Answer 29

Current assets+ fixed assets- current liabilities

Question 30

Equation for retained profit

Answer 30

Net assets- capital

Question 31

Equation for net profit

Answer 31

Gross profit- expenses