Formulas

Question 1

revenue

Answer 1

selling price 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

variable + fixed costs

Question 4

profit

Answer 4

total revenue - total costs

Question 5

market capitalisation

Answer 5

number of issued shares x current share price

Question 6

expected value

Answer 6

payoff x probability

Question 7

net gain

Answer 7

ev - associated cost

Question 8

market growth

Answer 8

change in the size of a market over time/original size of the market
x 100

Question 9

market share

Answer 9

sales of one product/brand/business/total sales in the market
x 100

Question 10

added value

Answer 10

sales revenue - cost of bought in goods and services

Question 11

labour productivity

Answer 11

output over time period/number of employees

Question 12

unit costs

Answer 12

total costs/number of units

Question 13

capacity utilisation

Answer 13

actual output/maximum output
x 100

Question 14

return on investment

Answer 14

profit from investment/cost of investment
x 100

Question 15

gross profit

Answer 15

revenue - direct costs

Question 16

operating profit

Answer 16

gross profit - indirect costs

Question 17

profit for the year

Answer 17

operating profit - other expenses (tax)

Question 18

profit margins

Answer 18

gross-operating-pfy / revenue
x 100

Question 19

variance

Answer 19

budgeted figure - actual figure

Question 20

contribution per unit

Answer 20

selling price - variable cost per unit

Question 21

total contribution

Answer 21

total revenue - total vc

Question 22

break-even output

Answer 22

fixed costs/contribution per unit

Question 23

margin of safety

Answer 23

actual output - break-even level of output

Question 24

labour turnover

Answer 24

number of staff leaving/number employed by the business
x 100

Question 25

employee retention rate

Answer 25

number of staff who remained with the business the whole period of time/number of staff at the start
x 100

Question 26

employee costs as a % of turnover

Answer 26

employee costs/turnover
x 100

Question 27

labour costs per unit

Answer 27

labour costs/turnover

Question 28

return on capital employed

Answer 28

operating profit/total equity + non-current liabilities
x 100

Question 29

current ratio

Answer 29

current assets/current liabilities

Question 30

gearing

Answer 30

non-current liabilities/total equity + non-current liabilities
x 100

Question 31

payable days

Answer 31

payables/cost of sales
x 365

Question 32

receivable days

Answer 32

receivables/revenue
x 365

Question 33

inventory turnover

Answer 33

cost of sales/average inventories held

Question 34

average rate of return

Answer 34

average annual return/initial cost of project
x
100