Formulas

Question 1

Revenue

Answer 1

selling price per unit x quantity sold

Question 2

Total variable costs

Answer 2

Variable cost per unit x number of units sold

Question 3

Profit

Answer 3

Total revenue - total costs
Total contribution - fixed costs

Question 4

Total costs

Answer 4

fixed costs + variable costs

Question 5

Market capitalization

Answer 5

Number of issued shares x current share price

Question 6

Net gain

Answer 6

EV - initial costs

Question 7

Expected Value

Answer 7

Probability x pay off (+ 2 together)

Question 8

Market growth

Answer 8

New market size - old market size / old market size x 100

Question 9

Market share

Answer 9

sales / total market share x 100

Question 10

Added value

Answer 10

sales revenue - cost of bought in goods and services

Question 11

Capacity utilization

Answer 11

output / capacity x 100 (%)

Question 12

Unit cost

Answer 12

total costs / units output

Question 13

Labor productivity

Answer 13

output per person / number of employees

Question 14

Re order level

Answer 14

lead time (days) x average daily usage + buffer stock level

Question 15

Return on investment

Answer 15

Profit / cost on investment x 100 (%)

Question 16

gross profit

Answer 16

sales revenue - cost of sales

Question 17

gross profit margin

Answer 17

gross profit / sales revenue x 100

Question 18

Net cash flow

Answer 18

Total inflows - total outflows

Question 19

closing balance

Answer 19

opening balance + net cash flow

Question 20

opening balance

Answer 20

closing balance of last month

Question 21

Expected profit / profit budget

Answer 21

Income budget - expenditure budget

Question 22

contribution per unit

Answer 22

selling price per unit - variable cost per unit

Question 23

Total contribution

Answer 23

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

Question 24

Break even output

Answer 24

fixed costs / contribution per unit

Question 25

Margin of safety

Answer 25

actual output - break even output

Question 26

Labor turnover

Answer 26

number of staff leaving / average number of staff employed x 100

Question 27

labor retention

Answer 27

staff employed at end - leavers / employed at the start x 100

Question 28

net current assets or working capital

Answer 28

current assets - current liabilities

Question 29

assets employed

Answer 29

total fixed and current assets - total current liabilities

Question 30

Current ratio

Answer 30

current assets / current liabilities
<1 liquidity problem, there aren’t enough assets to cover liabilities
>1 ideally 1.5 or 2

Question 31

Return on capital employed

Answer 31

Net profit / total equity + non current liabilities (capital employed / shareholder funds)

Question 32

Inventory turnover

Answer 32

cost of sales / costs of average stock held

Question 33

Payables days

Answer 33

payables / cost of sales x 365

Question 34

receivables days

Answer 34

receivables / sales revenue x 365

Question 35

Gearing

Answer 35

non current liabilities / total equity + non current liabilities (capital employed) x 100

Question 36

Cost of sales or purchases

Answer 36

Opening stock + purchases - closing stock
Revenue - gross profit

Question 37

Net profit margin

Answer 37

Net profit / revenue x 100

Question 38

Variance

Answer 38

Actual - budgeted

Question 39

Net profit

Answer 39

Gross profit - cost of sales

Question 40

Acid test

Answer 40

Current assets - stock / current liabilities

Question 41

Sales value

Answer 41

Average selling price x number of units sold

Question 42

Sales volume

Answer 42

Value of sales / average price