Formulae

Question 1

Total costs

Answer 1

fixed costs + variable costs

Question 2

Profit

Answer 2

total revenue - total costs
or
total contribution - fixed costs

Question 3

Variable costs (Total variable costs)

Answer 3

variable costs per unit X number of units

Question 4

Total revenue

Answer 4

selling price per unit X number of units sold

Question 5

Market capitalisation

Answer 5

number of issues shared X current market price

Question 6

Market share

Answer 6

sales of one product / total sales in marker X 100

Question 7

Labour productivity

Answer 7

output per period of time / number of employees X 100

Question 8

Unit costs

Answer 8

total costs of production / number of units of output produced

Question 9

Capacity utilisation

Answer 9

actual output in a given time period / maximum possible output X 100

Question 10

Return on investment

Answer 10

return on investment / cost of investment X 100

Question 11

Gross profit

Answer 11

sales revenue - costs of sales

Question 12

Operating profit

Answer 12

sales revenue - costs of sales (gross profit) - operating expenses

Question 13

Contribution per unit

Answer 13

selling price - variable costs per unit

Question 14

Total contribution

Answer 14

contribution per unit X units produced or sold
or
total revenue - total variable costs

Question 15

Break-even output

Answer 15

fixed costs / contribution per unit

Question 16

Margin of safety

Answer 16

actual level of output - breakeven level of output

Question 17

Gross profit margin

Answer 17

gross profit / sales revenue X 100

Question 18

Operating profit margin

Answer 18

operating profit / sales revenue X 100

Question 19

Labour turnover

Answer 19

number of staff leaving during the year / average number of staff employed by business during year X 100

Question 20

Labour costs per unit

Answer 20

labour costs / units of output

Question 21

ROCE (Return on Capital Employed)

Answer 21

operating profit / total equity + non-current liabilities x 100

Question 22

Current Ratio

Answer 22

current assets / current liabilities

Question 23

Gearing

Answer 23

non-current liabilities / total equity + non-current liabilities x 100

Question 24

Payable days

Answer 24

payable / cost of sales X 365

Question 25

Receivables days

Answer 25

receivables / revenue x 365

Question 26

Inventory turnover

Answer 26

costs of sales / average inventory held
or
inventories / cost of sales x 365

Question 27

ARR (Average Rate of Return)

Answer 27

average annual return / initial cost of project x 100

Question 28

net current assets/ liabilities

Answer 28

total current assets - total current liabilities

if liabilities are greater its net current liabilities vice versa

Question 29

working capital

Answer 29

Current assets - current liabilities

Question 30

capital employed

Answer 30

total equity + non-current liabilities

Question 31

assets employed

Answer 31

current assets + non-current assets