Formulae

Question 1

Gross profit

Answer 1

Gross profit = Total Revenue - cost of sales

Question 2

Gross profit margin

Answer 2

Gross profit margin = gross profit ÷ total revenue x 100

Question 3

Net profit

Answer 3

Net profit = gross profit - overheads

Question 4

Net profit margin

Answer 4

Net profit margin = net profit ÷ total revenue x 100

Question 5

Return on capital employed (ROCE)

Answer 5

ROCE = net profit ÷ capital employed x 100

Question 6

Labour productivity

Answer 6

Labour productivity = total output (in a given time period) ÷ average number of employees (in a given time period)

Question 7

Absenteeism rate

Answer 7

Absenteeism rate = number of staff absence days in a year ÷ total number of days that should have been worked

Question 8

Labour turnover

Answer 8

Labour turnover = number of staff leaving in given time period ÷ average number of staff in given time period

Question 9

Number of working days lost through accidents

Answer 9

Number of working days lost through accidents = no. of days lost through H&S ÷ total number of working days x 100

Question 10

Capacity utilisation

Answer 10

Capacity utilisation = current output ÷ maximum possible output x 100

Question 11

Elasticity of demand

Answer 11

Elasticity of demand = % change in quantity demanded ÷ % change in price