Formulas

Question 1

Market Share

Answer 1

(Your sales/total market sales) x 100

Question 2

Price elasticity of demand

Answer 2

% change in quantity/% change in price

Question 3

Income elasticity of demand

Answer 3

% change in quantity demanded/% change in price

Question 4

Cross elasticity demand

Answer 4

% change in the quantity demanded of product A / % change in the price of product B

Question 5

Contribution per unit

Answer 5

Selling price - variable cost

Question 6

Break even output

Answer 6

Fixed costs/contribution per unit

Question 7

Gross Profit

Answer 7

Revenue - cost of sale

Question 8

Gross Profit margin

Answer 8

(Gross profit/ sales revenue) x 100

Question 9

Operating profit

Answer 9

Gross profit- expenses (cost of marketing, wages, rent)

Question 10

Operating profit margin

Answer 10

(Operating profit/sales revenue) x 100

Question 11

Working capital

Answer 11

Current assets - current liabilities

Question 12

Productivity

Answer 12

Output per time period - input per time period

Question 13

Labour productivity

Answer 13

Output per time period/no. Workers/hours worked

Question 14

Net profit

Answer 14

Gross profit - other operating expenses and interest

Question 15

Average rate of return (%)

Answer 15

Average annual profit / cost of investment x 100

Question 16

% Mark Up (cost - plus pricing)

Answer 16

Unit cost + mark up

Question 17

Unit cost

Answer 17

Total Cost / Number of Units

Question 18

Net Cash Flow

Answer 18

Total Cash inflow - total cash outflow

Question 19

Opening balance

Answer 19

Closing balance from previous period

Question 20

Closing balance

Answer 20

Opening balance + net cash flow

Question 21

Sales revenue

Answer 21

Price x quantity sold

Question 22

Total cost

Answer 22

Total fixed costs x total variable cost

Question 23

Break even

Answer 23

Fixed cost / (selling price per unit - variable cost per unit)

Question 24

Contribution per unit

Answer 24

Selling price per unit - variable cost per unit

Question 25

Total contribution

Answer 25

Contribution per unit X quantity sold

Question 26

Profit

Answer 26

Total revenue - total costs - fixed costs

Question 27

Variance

Answer 27

Actual figure - budgeted figure

Question 28

Gross profit

Answer 28

Sales revenue- cost of sale

Question 29

Operating profit

Answer 29

Gross profit - other operating expenses (fixed costs and overheads)

Question 30

Net profit

Answer 30

Operating profit - finance costs and tax

Question 31

Profit margins

Answer 31

(Gross, net or operating profit / sales revenue) x 100

Question 32

Current ratio

Answer 32

Current assets/current liabilities

Question 33

Acid test ratio

Answer 33

(Current assets - inventories)/current liabilities

Question 34

Productivity

Answer 34

Output/inputs per time period

Question 35

Capacity utilisation

Answer 35

(Current or actual output/ maximum output) X 100

Question 36

Average rate of return

Answer 36

(Average annual profit/initial outlay) x 100

Question 37

Present value

Answer 37

Net cash flow X discount factor

Question 38

Net present Value (NPV)

Answer 38

Total of present value including the cost of investment

Question 39

Expected values (decision trees)

Answer 39

Probability of outcome X result of outcome

Question 40

Net gain

Answer 40

Total expected value for decision - cost of investment

Question 41

Float (critical path analysis)

Answer 41

Latest Finish Time - duration - earliest start time

Question 42

Gearing

Answer 42

(Non - current liabilities/capital employed) X 100

Question 43

Capital employed

Answer 43

Non current liabilities + total equity

Question 44

Return on capital employed

Answer 44

(Operating profit/capital employed) x 100

Question 45

Labour productivity

Answer 45

Output per period / number of employees per period

Question 46

Labour turnover

Answer 46

(Number of staff leaving in period/average number of staff) x 100

Question 47

Labour retention

Answer 47

(Staff not leaving in period/average number of staff in period) x 100

Question 48

Absenteeism

Answer 48

Total absence in the period/possible total x 100

Question 49

Return on Capital invested

Answer 49

Profit of investment/cost of investment