formulas

Question 1

net cash flow

Answer 1

total income - total expenditure

Question 2

total revenue

Answer 2

selling price per unit x output

Question 3

total cost

Answer 3

fixed costs + variable costs

Question 4

total contribution

Answer 4

revenue - variable costs

Question 5

contribution per unit

Answer 5

selling price per unit - variable cost per unit

Question 6

break even (sales value)*

Answer 6

break even (units) x selling price per unit

Question 7

break even (units) *

Answer 7

fixed costs / contribution per unit

Question 8

margin of safety (units)

Answer 8

amount of units sold - break even point (units)

Question 9

margin of safety (value) *

Answer 9

margin of safety (unit) x selling price per unit

Question 10

sales revenue

Answer 10

output x selling price per unit

Question 11

cost of goods sold

Answer 11

(opening inventories + purchases) - closing inventories

Question 12

gross profit

Answer 12

sales revenue - cost of goods sold

Question 13

profit/loss for the year

Answer 13

(gross profit - expenses) + other income

Question 14

net current assets

Answer 14

current assets - current liabilities

Question 15

net assets

Answer 15

total assets - current liabilities

Question 16

capital employed

Answer 16

opening capital + retained profit - drawings

Question 17

straight line depreciation

Answer 17

(historical cost - residual value) / expected life

Question 18

reducing balance depreciation

Answer 18

historic value x percentage of depreciation (repeat each year)

Question 19

total equity

Answer 19

share capital + reserves

Question 20

expected netbook value

Answer 20

original cost - depreciation

Question 21

gross profit margin %

Answer 21

gross profit / sales revenue x100

Question 22

net profit margin %

Answer 22

net profit for year / sales revenue x100

Question 23

mark up %

Answer 23

gross profit / cost of goods sold x100

Question 24

return on capital employed %

Answer 24

operating profit / capital employed x100

Question 25

profit margin %

Answer 25

operating profit / sales revenue x100

Question 26

current ratio

Answer 26

current assets / current liabilities

Question 27

liquid capital ratio

Answer 27

current assets - inventory / current liabilities

Question 28

trade receivable (days)

Answer 28

trade receivables / credit sales x365

Question 29

trade payable (days)

Answer 29

trade payables / credit purchases x365

Question 30

inventory turnover

Answer 30

average inventory / cost of sales x365

Question 31

average inventory

Answer 31

opening inventory + closing inventory / 2

Question 32

closing balance

Answer 32

opening balance + net cash flow

Question 33

profit (using contribution)

Answer 33

contribution per unit x margin of safety