Formulae

Question 1

Labour Turnover

Answer 1

(Number of staff leaving) / (average number of staff) x100

Question 2

Operating Profit Margin

Answer 2

(operating profit) / (revenue) x100

Question 3

Recievables Days

Answer 3

(Recievablesx365) / (Sales Revenue)

Question 4

Profit

Answer 4

Total Revenue - Total Costs

Total Contribution - Fixed Costs

Question 5

Retention Rate

Answer 5

(Number of employees serving for 1yr+) / (Average number of staff) x100

Question 6

Variance

Answer 6

Actual spent - Budget

Question 7

Income elasticity of demand

Answer 7

(% change in quantity demanded) / (% change in income)

Question 8

Profit of the year margin

Answer 8

(Profit of the year) / (revenue) x100

Question 9

Break Even

Answer 9

(Fixed costs) / (contribution per unit)

Question 10

GDP per capita

Answer 10

GDP / Total population

Question 11

Labour cost per unit

Answer 11

Total Labour Costs / Total Output

Question 12

Market Capitalisation

Answer 12

Current share price x Number of issued shares

Question 13

Market Share

Answer 13

(Sales of product or business) / (Total market sales) x100

Question 14

Inventory Turnover

Answer 14

Cost of sales / Average inventory held

Question 15

Price elasticity of demand

Answer 15

% change in quantity demanded / % change in price

Question 16

market growth

Answer 16

(Change in market sales over a period of time) / (original market sales) x100

Question 17

Sales Growth

Answer 17

(Change in sales over a period of time) / (Original Sales) x 100

Question 18

Revenue

Answer 18

Number of units sold x Price per unit

Question 19

Return on capital employed (ROCE)

Answer 19

(Operating Profit) / (Total equity + non-current liabilities) x 100

Question 20

Employee costs as a % of turnover

Answer 20

(Employee Costs) / (Revenue) x100

Question 21

Total Costs

Answer 21

Fixed Costs + Variable Costs

Question 22

Liquidity (current ratio)

Answer 22

Current assets / Current liabilities

Question 23

Labour Productivity

Answer 23

Total output / number of workers

Question 24

Gross Profit Margin

Answer 24

(gross profit) / (sales revenue) x 100

Question 25

Acid Test Ratio

Answer 25

(Current assets - stocks/inventory) / (Current liabilities)

Question 26

Payables Days

Answer 26

(Payables x 365) / (Cost of sales)

Question 27

Net Cash Flow

Answer 27

Total inflows - Total outflows

Question 28

Total contribution

Answer 28

Contribution per unit x Number of units sold

OR

Total revenue - total variable costs

Question 29

Gearing

Answer 29

(Non Current Liabilities) / (Total Equity + Non Current Liabilities) x 100

Question 30

Capacity Utilisation

Answer 30

(Actual Capacity) / (Maximum Capacity) x 100

Question 31

gross profit

Answer 31

sales revenue- cost of sales

Question 32

operating profit

Answer 32

gross profit-operating expenses

Question 33

profit of the year

Answer 33

operating profit-tax and interest

Question 34

Expected value of decision with two possible outcomes

eg) A & B

Answer 34

[ Pay off of A x probability of A] + [payoff of B x probability of B]

Question 35

Net gain

Answer 35

Expected value - initial cost of decision

Question 36

added value

Answer 36

sales revenue - costs of bought in goods and services

Question 37

Unit costs

Answer 37

total costs/ number of units of output

Question 38

Return on investment

Answer 38

profit from the investment/ cost of the investment x100

Question 39

contribution per unit

Answer 39

selling price - variable costs per unit

Question 40

Average rate of return

Answer 40

average annual return / initial cost of project x100