Formulas

Question 1

market share =

Answer 1

(sales of a total market held by one product or company / total market sales) x 100

Question 2

market growth =

Answer 2

(change in size of the market / original size of the market) x 100

Question 3

sales growth =

Answer 3

(change in sales of the business / original sales of the business) x 100

Question 4

profit =

Answer 4

total revenue - total costs

Question 5

profit (using contribution) =

Answer 5

total contributions - fixed costs

Question 6

total revenue =

Answer 6

selling price x number of units sold

Question 7

total costs =

Answer 7

fixed costs + variable costs

Question 8

contribution per unit =

Answer 8

selling price per unit - variable cost per unit

Question 9

total contribution =

Answer 9

contribution per unit x number of units sold

Question 10

break even occurs when…

Answer 10

total revenue = total costs

Question 11

break even output (units) =

Answer 11

fixed costs / contribution per unit

Question 12

margin of safety =

Answer 12

current output - breakeven output

Question 13

total variable costs =

Answer 13

variable cost per unit x number of units

Question 14

added value =

Answer 14

selling price - cost of bought in goods/services

Question 15

gross profit =

Answer 15

sales revenue - variable costs

Question 16

operating profit =

Answer 16

sales revenue - variable costs - fixed costs

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

return on capital employed =

Answer 19

(return on investment / cost of investment) x 100

Question 20

return on investment =

Answer 20

(net profit / capital invested) x 100

Question 21

labour turnover =

Answer 21

(number of leavers / average number of employees) x 100

Question 22

labour productivity =

Answer 22

total value of output / total number of employeeds

Question 23

labour absenteeism =

Answer 23

(average number of staff absent on one day / total number of staff) x 100

Question 24

capacity utilisation =

Answer 24

(current output / maximum output) x 100

Question 25

unit cost =

Answer 25

total costs / output

Question 26

labour cost per unit =

Answer 26

labour costs / units of output

Question 27

market capitalisation of a business =

Answer 27

number of issues shares x current share price

Question 28

in a decision tree, net gain =

Answer 28

expected value - initial cost of decision

Question 29

expected value of a decision with two possible outcomes =

Answer 29

(pay off of A x probability of A) + (pay off of B x probability of B)

Question 30

reorder quantity =

Answer 30

lead times (in days) x average daily usage

Question 31

profit for the year =

Answer 31

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

Question 32

employee retention rate =

Answer 32

(number of employees at end of period - number of leavers / number of employees at end of period) x 100

Question 33

employee costs as a percentage of turnover =

Answer 33

(employee costs / sales turnover ) x 100