Formulas

Question 1

revenue

Answer 1

selling price per unit x number of units sold

Question 2

total variable costs

Answer 2

variable costs per unit x number of units sold

Question 3

total costs

Answer 3

fixed costs + variable costs

Question 4

profit (2)

Answer 4

total revenue - total costs
OR
total contribution - fixed costs

Question 5

market capatalisation

Answer 5

number of issued shares x current share price

Question 6

expected value of a decisions with two possible outcomes

Answer 6

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

Question 7

net gain

Answer 7

expected value - initial cost of decision

Question 8

market growth (%)

Answer 8

change in size of market over a period / original size of market
x100

Question 9

market share (%)

Answer 9

sales of one product OR brand OR business / total sales in the market
x100

Question 10

added value

Answer 10

sales revenue - costs

Question 11

labour productivity

Answer 11

output over a time period / number of employees

Question 12

unit costs (average costs)

Answer 12

total costs / number of units of output

Question 13

capacity utilisation (%)

Answer 13

actual output / maximum possible output
x100

Question 14

return on investment (%)

Answer 14

profit from investment / cost of investment
x100

Question 15

gross profit

Answer 15

revenue - cost of sales

Question 16

operating profit

Answer 16

gross profit - expenses

Question 17

profit for the year (net profit)

Answer 17

operating profit - interest and taxation

Question 18

gross profit margin (%)

Answer 18

gross profit / revenue
x100

Question 19

operating profit margin (%)

Answer 19

operating profit / revenue
x100

Question 20

net profit margin (%)

Answer 20

profit for the year (net profit) / revenue
x100

Question 21

variance

Answer 21

budgeted figure - actual figure

Question 22

contribution per unit

Answer 22

selling price - variable costs per unit

Question 23

total contribution (2)

Answer 23

contribution per unit x units sold
OR
total revenue - total variable costs

Question 24

breakeven output

Answer 24

fixed costs / contribution per unit

Question 25

margin of safety

Answer 25

actual level of output - breakeven level of output

Question 26

labour turnover (%)

Answer 26

number of staff leaving / number of staff employed by the business
x100

Question 27

employee retention rate (%)

Answer 27

number of employees with 1+ years service / total number of employees
x100

Question 28

employee costs as a percentage of turnover (%)

Answer 28

employee costs / turnover
x100

Question 29

labour costs per unit

Answer 29

labour costs / units of output

Question 30

return on capital employed (ROCE) (%)

Answer 30

operating profit / total equity + non current liabilities
x100

Question 31

capital employed

Answer 31

total equity + non current liabilites

Question 32

current ratio

Answer 32

current assets / current liabilities

Question 33

gearing (%)

Answer 33

non current liabilities / total equity + non current liabilities
x100

Question 34

payables days

Answer 34

payables / cost of sales
x365

Question 35

recievables days

Answer 35

recievables / revenue
x365

Question 36

inventory turnover

Answer 36

cost of sales / average inventories held

Question 37

average rate of return (ARR) (%)

Answer 37

average annual return / initial cost of project
x100

Question 38

income elasticity of demand

Answer 38

percentage change in quantity demanded / percentage change in income

Question 39

price elasticity of demand

Answer 39

percentage change in quantity demanded / percentage change in price

Question 40

absenteeism

Answer 40

number of absent days/ number of available work days in a given period
x100