Finance Formula

Question 1

Calculate revenue

Answer 1

Revenue = Quantity Sold x Price

Question 2

Calculate variable costs

Answer 2

Variable Costs = number sold x cost per unit

Question 3

Total costs

Answer 3

Total Costs = fixed costs + variable costs

Question 4

Profit

Answer 4

Profit = revenue - total costs

Question 5

Break-even Point (number of units sold)

Answer 5

Break-even point (units) = fixed cost
____________
Selling price – variable cost

Question 6

Break-even Point (Revenue required)

Answer 6

Break-even point (revenue) = break even point in units x selling price

Question 7

Margin of Safety

Answer 7

Margin of Safety = actual sales – break-even sales

Question 8

Interest paid on loans & overdrafts

Answer 8

Interest on loans = (total repayment – borrowed amount) / borrowed amount X 100

Question 9

Net cash flow

Answer 9

Cash in (inflow or receipts) - Cash out

Question 10

Closing balance on Cash Flow Forecast

Answer 10

Closing balance = opening balance + net cash flow