FORMULA

Question 1

(3.1) Variable Costs :

Answer 1

output x variable cost per unit

Question 2

(3.1) Total Costs :

Answer 2

variable costs + fixed costs

Question 3

(3.1) Revenue :

Answer 3

quantity sold x selling price

Question 4

(3.1) Unit costs :

Answer 4

total costs / number of units produced

Question 5

(3.1) Profit :

Answer 5

total Revenue - total costs
OR
total contribution - total costs

Question 6

(3.1) Market Capitalisation :

Answer 6

current share price x number of shares sold

Question 7

(3.2) Expected Value :

Answer 7

probability x outcome
(and then add both options up together to get the EV).

Question 8

(3.2) (Decision Tree) Net Gain :

Answer 8

expected value - cost of decision

Question 9

(3.3) Sales Volume :

Answer 9

number of items sold

Question 10

(3.3) Sales Value :

Answer 10

volume x selling price

Question 11

(3.3) Market Growth :

Answer 11

(new market size - old market size) / old market size x 100
(if number is negative then it’s shrinking)

Question 12

(3.3) Sales Growth :

Answer 12

(sales this year - sales last year) / sales last year x 100

Question 13

(3.3) Market Share :

Answer 13

sales / total market size x 100

Question 14

(3.3) Price Elasticity of Demand (PED) :

Answer 14

% change in quantity demanded / % change in price

Question 15

(3.3) Income Elasticity of Demand (YED) :

Answer 15

% change in quantity demanded / % change in income

Question 16

(3.4) Labour productivity :

Answer 16

output per period / employees per period

Question 17

(3.4) Capacity :

Answer 17

maximum level of production

Question 18

(3.4) Capacity Utilisation :

Answer 18

actual output / maximum output x 100

Question 19

(3.5) Variance :

Answer 19

actual - budget

Question 20

(3.5) Contribution Per Unit :

Answer 20

selling price per unit - variable cost per unit

Question 21

(3.5) Total Contribution :

Answer 21

contribution per unit x units sold

Question 22

(3.5) Break Even :

Answer 22

fixed costs / (selling price per unit- variable costs per unit) x 100

Question 23

(3.5) Margin of Safety :

Answer 23

actual output - break even output

Question 24

(3.5) Gross Profit :

Answer 24

sales revenue - cost of sales

Question 25

(3.5) Gross Profit Margin :

Answer 25

gross profit / sales revenue x 100

Question 26

(3.5) Operating Profit :

Answer 26

gross profit - expenses

Question 27

(3.5) Operating Profit Margin :

Answer 27

operating profit / sales revenue x 100

Question 28

(3.5) Profit for the Year :

Answer 28

operating profit - interest and taxation

Question 29

(3.5) Profit for the Year Margin :

Answer 29

profit for the year / sales revenue x 100

Question 30

(3.5) Return on Investment (ROI) :

Answer 30

operating profit / capital invested x 100

Question 31

(3.5) Net Cash Flow :

Answer 31

total inflows - total outflows

Question 32

(3.5) Closing Balance :

Answer 32

opening balance + net cash flow

Question 33

(3.6) Employee costs as % of Turnover :

Answer 33

employee costs / sales revenue x 100

Question 34

(3.6) Labour productivity :

Answer 34

output per period / number pf employees per period

Question 35

(3.6) Labour Costs per Unit :

Answer 35

total labour costs / total units of output

Question 36

(3.6) Labour Turnover :

Answer 36

number of employees leaving over a given period / average number employed over a given period x 100

Question 37

(3.6) Retention Rate :

Answer 37

number of employees with one or more years' service / overall workforce number x 100

Question 38

(3.6) Absenteeism :

Answer 38

number of staff absent / number of staff in total x 100 OR number of absent days / number of available work days in a given period

Question 39

(3.7) Current Assets : (things business owns, +)

Answer 39

inventories + receivables + cash and other cash equivalents

Question 40

(3.7) Working Capital OR Net Current Assets :

Answer 40

current assets - current liabilities

Question 41

(3.7) Net Assets :

Answer 41

total assets - non current liabilities OR non current assets + working capital - non current liabilities (should balance EQUITY)

Question 42

(3.7) Assets Employed :

Answer 42

net current assets + non current assets

Question 43

(3.7) Total Equity :

Answer 43

share capital + reserves

Question 44

(3.7) Capital Employed :

Answer 44

total equity + non current liabilities

Question 45

(3.7) Return on Capital Employed (ROCE) :

Answer 45

operating profit or profit before tax / (total equity + non current liabilities) x 100

Question 46

(3.7) Current Ratio :

Answer 46

current assets / current liabilities

Question 47

(3.7) Gearing :

Answer 47

non current liabilities / (total equity + non current liabilities) x 100

Question 48

(3.7) Payables :

Answer 48

payables / cost of sales x 365

Question 49

(3.7) Receivables :

Answer 49

receivables / revenue x 365

Question 50

(3.7) Inventory Turnover :

Answer 50

cost of goods sold / average inventories held

Question 51

(3.7) Payback :

Answer 51

1) Calculate NCF if not already (inflows-outflows). 2) Add up each years NCF until yo get the cost of initial investment (which is year 0). 3) If the cost of initial investment is between years, do this formula : amount of investment not recovered / revenue generated in the near year x 365 Then add the days and how many years to get payback

Question 52

(3.7) NPV :

Answer 52

1) Multiply the NCF by the discount factor for that year. 2) Pick the correct discount factor based on the % change, e.g, 10%. 3) Get NPV by adding them up together. 4) Minus this NPV from initial investment to calculate return.

Question 53

(3.7) ARR :

Answer 53

1) Add up positive cash flows of each year (not Year 0). 2) Subtract the cost of initial investment e.g. 8m. 3) Divide by lifespan of investment. 4) Divide by cost of initial investment to find %. 5) E.g. NCF all added together is 11. So 11-8 (initial investment) = 3 / 5 (years) = 600,000 per year, 600,000 as a % of 8m is 600,000 / 8,000,000 x 100 = 7.5% = ARR.

Question 54

anymore???