Formula

Question 1

market capitalisation

Answer 1

market capitalisation = current share price x no. ordinary shares issued

Question 2

expected value

Answer 2

expected value = pay off x probability

Question 3

net gain

Answer 3

net gain = expected value - costs

Question 4

what must be done before calculating net gain?

Answer 4

add all expected values to get total expected value, and then minus costs

Question 5

sales growth

Answer 5

sales growth = (sales in that year - sales in previous year / sales in previous year) x 100

Question 6

market growth

Answer 6

market growth = (market size in that year - market size in previous year / market size in previous year) x 100

Question 7

market share

Answer 7

market share = (sales of this product / total sales in market) x 100

Question 8

market size

Answer 8

market size = (sales / market share) x 100

Question 9

PED

Answer 9

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

Question 10

YED

Answer 10

YED = % change in quantity demanded / % change in income

Question 11

% change

Answer 11

% change = (new - original / original) x 100

Question 12

labour productivity

Answer 12

labour productivity = output per time period / no. of employees

Question 13

capacity utilisation

Answer 13

capacity utilisation = (actual output over period / maximum output over period) x 100

Question 14

unit costs (average costs)

Answer 14

unit costs = total costs / total output

Question 15

revenue

Answer 15

revenue = no. of sales x selling price

Question 16

variable costs

Answer 16

variable costs = variable cost per unit x no. of sales

Question 17

total costs

Answer 17

total costs = fixed costs + total variable costs

Question 18

profit

Answer 18

profit = revenue - expenditure

Question 19

gross profit

Answer 19

gross profit = revenue - cost of sales

Question 20

operating profit

Answer 20

operating profit = gross profit - expenses

Question 21

net profit

(2 formulae)

Answer 21

net profit = operating profit - tax

net profit = total revenue - total costs

Question 22

net cash flow

Answer 22

net cash flow = total inflows - total outflows

Question 23

return on investment (ROI)

Answer 23

ROI = (profit of investment / cost of investment) x 100

Question 24

variance

Answer 24

variance = budget - actual figure

Question 25

opening balance

Answer 25

opening balance = closing balance of previous period

Question 26

closing balance

Answer 26

closing balance = opening balance - net cash flow

Question 27

contribution

Answer 27

contribution = selling price - variable costs

Question 28

break even

Answer 28

break even = fixed costs / contribution

Question 29

margin of safety

Answer 29

margin of safety = actual sales - break even point

Question 30

gross profit margin

Answer 30

gross profit margin = (gross profit / revenue) x 100

Question 31

operating profit margin

Answer 31

operating profit margin = (operating profit / revenue) x 100

Question 32

net profit margin (profit for year margin)

Answer 32

net profit margin = (net profit / revenue) x 100

Question 33

labour turnover

Answer 33

labour turnover = (no. employees leaving over period / average employed over period) x 100

Question 34

labour cost per unit

Answer 34

labour cost per unit = total labour costs / total units of output

Question 35

employee costs as percentage of turnover

Answer 35

employee costs as % of turnover = (labour costs / turnover) x 100