formulaes

Question 1

revenue =

Answer 1

selling price per unit x number of units sold

Question 2

variable costs =

Answer 2

variable cost per unit x number of units sold

Question 3

total costs =

Answer 3

fixed costs + variable costs

Question 4

profit=

Answer 4

total revenue - total costs

Question 5

market capitalisation of a business =

Answer 5

number of shared issued x current share price

Question 6

net gain

Answer 6

expected value - initial cost of decision

Question 7

market growth (%)

Answer 7

change in size of market over a period/ original size of market x 100

Question 8

market share (%)

Answer 8

sales of product/ total sales of the market x 100

Question 9

added value

Answer 9

sales revenue - costs of brought in goods and services

Question 10

labour productivity

Answer 10

output over a time period/ number of employees

Question 11

unit costs(average costs)

Answer 11

total costs/number of units of output

Question 12

capacity utilization (%)

Answer 12

actual output/maximum possible capacity x 100

Question 13

return on investment (%)

Answer 13

profit from the investment(£)/ cost of the investment(£) x 100

Question 14

gross profit

Answer 14

revenue - costs of sales

Question 15

profit from operations = operating profit =

Answer 15

gross profit - operating expensive

Question 16

profit for year

Answer 16

operating profit + profit from other activities - net finance costs - tax

Question 17

gross profit margin (%)

Answer 17

gross profit/ revenue x 100

Question 18

profit from operations margin

Answer 18

operating profit/revenue x 100

Question 19

profit for year margin (%)

Answer 19

profit for the year/ revenue x 100

Question 20

variance

Answer 20

budgeted figure - actual figure

Question 21

contribution per unit

Answer 21

selling price - variable cost per unit

Question 22

total contribution

Answer 22

contribution per unit x unit sold
or
total revenue - total variable cost

Question 23

break-even output

Answer 23

fixed costs/ contribution per unit

Question 24

margin of safety

Answer 24

actual level of output - break-even level of output

Question 25

labour turnover (%)

Answer 25

number of staff leaving/ number of staff employed x 100

Question 26

Employee retention rate (%) for a particular time period

Answer 26

Number of employees who remained with the business
for the whole period of time/ Number of employees at start of the time period x 100

Question 27

Employee costs as percentage of turnover

Answer 27

employee costs / turnover x 100

Question 28

labour costs per unit

Answer 28

labour costs/ units of output

Question 29

return on capital employed(ROCE)(%)

Answer 29

operating profit/ total equity + ncl x 100

Question 30

current ratio

Answer 30

current assets/ current liabilities

Question 31

gearing (%)

Answer 31

ncl / total equity + ncl x 100

Question 32

payable days

Answer 32

payables / cost of sales x 365

Question 33

receivable days

Answer 33

receivables/ revenue x 365

Question 34

inventory turnover

Answer 34

cost of sales/ average inventory held

Question 35

average rate of return (%)

Answer 35

average annual return (£) / initial cost of project (£) x 100