Formulas

Question 1

Market share formula

Answer 1

sales held by one product or company divided by the total market sales x100

Question 2

Market growth formula

Answer 2

change in size of the market divided by original size of market x100

Question 3

sales growth

Answer 3

change in sales of the business divided by original sales of business x100

Question 4

profit

Answer 4

total revenue - total costs

Question 5

total revenue

Answer 5

selling price x number sold

Question 6

total costs

Answer 6

fixed costs + variable costs

Question 7

contribution per unit

Answer 7

selling price per unit - variable cost per unit

Question 8

total contribution

Answer 8

contribution per unit x no. of units sold

Question 9

breakeven occurs when

Answer 9

total revenue - total costs

Question 10

margin of safety

Answer 10

current output - breakeven output

Question 11

total variable costs

Answer 11

variable cost per unit x no. of units

Question 12

added value

Answer 12

selling price - costs of bought in goods / services

Question 13

gross profit

Answer 13

sales revenue - variable costs

Question 14

operating profit

Answer 14

sales revenue - variable costs - fixed costs

Question 15

gross profit margin %

Answer 15

gross profit divided by sales revenue x100

Question 16

operating profit margin %

Answer 16

operating profit divided by sales revenue x100

Question 17

ROCE (return on capital employed)

Answer 17

return on investment x100 divided by cost of investment x100

Question 18

return of investment

Answer 18

net profit divided by capital invested x100

Question 19

labour turnover

Answer 19

number of leavers per year divided by average number of leavers per year x100

Question 20

labour productivity

Answer 20

total value of output divided by total number of employees

Question 21

labour absenceteeism

Answer 21

average number of staff absent on one day divided by total number of staff x100

Question 22

capacity utilisation

Answer 22

current output divided by max output x100

Question 23

unit costs (average costs)

Answer 23

total costs divided by output

Question 24

Labour cost per unit

Answer 24

labour costs divided by units of output

Question 25

price elasticity of demand

Answer 25

% change in demand divided by % change in price

Question 26

market capitalisation of business

Answer 26

number of issued shares x current share price

Question 27

in a decision tree, net gain

Answer 27

expected value - initial cost of decision

Question 28

re order quantity

Answer 28

lead time (in days) x average daily use

Question 29

re order level

Answer 29

re order quantity + minimum inventory level

Question 30

profit of the year

Answer 30

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

Question 31

variance

Answer 31

difference between actual and budgeted figure

Question 32

employee retention rate

Answer 32

no. of employees at end of period - number of leavers divided by no. of employees at end of period x100

Question 33

employee costs as a percentage of turnover

Answer 33

employee costs divided by sales turnover x100

Question 34

current ratio

Answer 34

current assets divided by current liabilities