Formulae

Question 1

total costs

Answer 1

fixed costs + variable costs

Question 2

profit 1

Answer 2

total revenue - total costs

Question 3

profit 2

Answer 3

total contribution - fixed costs

Question 4

variable costs

Answer 4

variable cost per unit x number of units sold

Question 5

total revenue

Answer 5

selling price per unit x number of units sold

Question 6

market capitalisation

Answer 6

number of issued share x current share price

Question 7

expected value

Answer 7

(payoff of A x probability of A) + (payoff of B x probability of B)

Question 8

net gain

Answer 8

expected value - initial cost of decision

Question 9

market size (volume)

Answer 9

quantity of goods produced in a market over a year

Question 10

market size (value)

Answer 10

total sales revenue in a market over a year

Question 11

sales value

Answer 11

total sales of a business over a year

Question 12

market growth %

Answer 12

change in market size in a year/ market size in this year x 100

Question 13

sales growth %

Answer 13

change in sales over the year/ sales this year x100

Question 14

market share %

Answer 14

sales of one product/brand / total market sales x100

Question 15

price elasticity of demand

Answer 15

inelastic between 0 and 1

Question 16

added value

Answer 16

sales revenue - costs of bought-in goods and services

Question 17

labour productivity

Answer 17

output in time period / number of employees

Question 18

unit costs

Answer 18

total cost of production / units of output

Question 19

capacity utilisation %

Answer 19

actual output/ maximum possible output x100

Question 20

return on investment %

Answer 20

return on investment / cost of investment x100

Question 21

gross profit

Answer 21

sales revenue - cost of sales

Question 22

operating profit

Answer 22

sales revenue - cost of sales - operating expenses

Question 23

profit for the year

Answer 23

operating profit + other profit - net finance costs - tax

Question 24

contribution per unit

Answer 24

selling price - variable costs per unit

Question 25

total contribution 1

Answer 25

contribution per unit x units produced

Question 26

total contribution 2

Answer 26

total revenue - total variable costs

Question 27

break even output

Answer 27

fixed costs / contribution per unit x 100

Question 28

break even

Answer 28

when total revenue = total costs

Question 29

margin of safety

Answer 29

actual level of output - breakeven level of output

Question 30

gross profit margin

Answer 30

gross profit / sales revenue x100

Question 31

operating profit margin

Answer 31

operating profit / sales revenue x100

Question 32

profit for the year margin

Answer 32

profit for the year / sales revenue x100

Question 33

labour turnover

Answer 33

number of staff leaving in a year / average number of staff employed in a year x100

Question 34

retention rate

Answer 34

number of employees - number of leavers / number of employees x100

Question 35

labour cost per unit

Answer 35

labour costs / units of output

Question 36

return on capital employed

Answer 36

operating profit / total equity + non-current liabilities x100

Question 37

current ratio

Answer 37

current assets / current liabiities

Question 38

gearing

Answer 38

non-current liabilities / total equity + non-current liabilities x100

Question 39

payables days

Answer 39

payables/ cost of sales x365

Question 40

receivables days

Answer 40

receivables / revenue x365

Question 41

inventory turnover

Answer 41

cost of goods sold / average inventories held

Question 42

average rate of return

Answer 42

net return from profit / initial cost of project x100