Formulas

Question 1

What is the equation for Net Cash Flow?

Answer 1

Total inflow - Total outflow

Question 2

What is the equation for Total Revenue?

Answer 2

Selling price x Quantity sold

Question 3

What is the equation for Total Costs?

Answer 3

Fixed costs + Total variable costs

Question 4

What is the equation for Total Contribution?

Answer 4

Revenue - Total variable costs

Question 5

What is the equation for Contribution Per Unit?

Answer 5

Selling price - Variable cost per unit

Question 6

What is the equation for Profit (using Contribution)?

Answer 6

Contribution per unit x Margin of safety

Question 7

What is the equation for Break-even?

Answer 7

Total fixed costs ÷ Contribution per unit

Question 8

What is the equation for Margin of Safety?

Answer 8

Revenue - Break even

Question 9

What is the equation for Cost of Goods Sold?

Answer 9

(Opening inventory + Purchases) - Closing inventory

Question 10

What is the equation for Gross Profit?

Answer 10

Revenue - COGS

Question 11

What is the equation for Net Profit?

Answer 11

Total revenue - Total expenses

Question 12

What is the equation for Net Book Value?

Answer 12

Cost - Depreciation

Question 13

What is the equation for Net Current Assets?

Answer 13

Current assets - Current liabilities

Question 14

What is the equation for Net Assets?

Answer 14

(Non current assets + Net current assets) - Long term liabilities

Question 15

What is the equation for Capital Employed?

Answer 15

Capital + Retained profit

Question 16

In balance sheets, what needs to balance?

Answer 16

Net assets = Capital employed

Question 17

What is the equation for Gross Profit Margin?

Answer 17

(Gross profit ÷ Revenue) x 100

Question 18

What is the equation for Mark-up?

Answer 18

(Gross profit ÷ COGS) x 100

Question 19

What is the equation for Profit Margin?

Answer 19

(Profit ÷ Revenue) x 100

Question 20

What is the equation for Return on Capital Employed?

Answer 20

(Profit ÷ Capital employed) x 100

Question 21

What is the equation for Current Ratio?

Answer 21

Current assets ÷ Current liabilities

Question 22

What is the equation for Liquid Capital Ratio?

Answer 22

(Current assets - Inventory) ÷ Current liabilities

Question 23

What is the equation for Trade Receivable Days?

Answer 23

(Trade receivables ÷ Credit sales) x 365

Question 24

What is the equation for Trade Payable Days?

Answer 24

(Trade payables ÷ Credit purchases) x 365

Question 25

What is the equation for Inventory Turnover?

Answer 25

(Average inventory ÷ Cost of sales) x 365

Question 26

What is the equation for Straight Line Depreciation?

Answer 26

(Historic value – Residual value) ÷ Expected life