Formulas

Question 1

Gross Profit

Answer 1

Sales revenue - Cost of sales

Question 2

Break Even

Answer 2

Fixed costs/(Price - Avergae variable cost)

Question 3

Cost of Sales (COS)

Answer 3

(Opening stock + Purchases) - Closing stock

Question 4

Total Costs

Answer 4

Total Variable costs + Total fixed costs

Question 5

Working capital (Net current assets)

Answer 5

Current assets - Current liabilities

Question 6

Profit

Answer 6

Total revenue - Total costs

Question 7

Expenses

Answer 7

Net profit - Gross profit

Question 8

Acid test (quick) ratio

Answer 8

(Current assests - Stock) / Current liabilities

Question 9

Unit contribution

Answer 9

Price - Average variable cost

Question 10

Retained profit

Answer 10

Profit after interest and tax - Dividends

Question 11

Net assets

Answer 11

Total Assets - Total Liabilities

Question 12

Profit Before Intrest and Tax

Answer 12

Gross profit - Expenses

Question 13

Equity

Answer 13

Share Capital + Retained Earnings

Question 14

Capital employed

Answer 14

Non-current liabilities + Equity

Question 15

Gross profit margin

Answer 15

(Gross profit / Sales revenue) x 100

Question 16

Current ratio

Answer 16

Current assets / Current liabilities

Question 17

Margin of safety

Answer 17

Actual sales volume - Break even sales volume

Question 18

Market share

Answer 18

(Firm’s sales revenue/Total industry’s sales revenue) x 100

Question 19

Return on capital employed

Answer 19

(Profit before intrest and tax / Capital employed) x 100

Question 20

Reorder quantity

Answer 20

Maximum stock level - Buffer stock level

Question 21

Defect rate

Answer 21

(Number of defects/Output tested) x 100

Question 22

Labour productivty rate

Answer 22

Total output / Total labour input

Question 23

Lead time

Answer 23

Date of delivery - Date when order was placed

Question 24

Straight line depreciation (per year)

Answer 24

(Purchase cost - Residual value) / Lifespan of asset

Question 25

Units of production method (depriciation)

Answer 25

(Purchase cost - Residual Value / Estimated total units to be produced) x Actual Units produced

Question 26

Labour turnover rate

Answer 26

(Number of employee departures/Average number of employees) x 100

Question 27

Variance

Answer 27

Actual - Budgeted

Question 28

Operating leverage

Answer 28

Total contribution / Profit

Question 29

Payback Period

Answer 29

Initial Investment Cost/Annual Cashflow from investment

Question 30

Average Rate of Return

Answer 30

(Total Returns - Capital Cost)/Years of Usage / Capital Cost x 100

Question 31

Net Present Value

Answer 31

Total Present Values - Original Cost