formulas

Question 1

Revenue (Sales or Turnover)

Answer 1

Selling price per unit × Number of units sold

Question 2

Variable costs (Total variable costs)

Answer 2

Variable cost per unit × Number of units sold

Question 3

Total costs

Answer 3

Fixed costs + Variable costs

Question 4

profit

Answer 4

Total revenue − Total costs
OR
Total contribution − Fixed costs

Question 5

Market capitalisation of a business

Answer 5

Number of issued shares × Current share price

Question 6

Net gain

Answer 6

Expected value − Initial cost of decision

Question 7

Market growth (%)

Answer 7

× 100
Change in the size of the market
over
a period Original size of the market

Question 8

Market share (%) =

Answer 8

× 100
Sales of one product
OR
brand
OR
business Total sales in the market

Question 9

Added value

Answer 9

Sales revenue − costs of bought-in goods and services

Question 10

Labour productivity

Answer 10

total Number of employees

Question 11

unit costs

Answer 11

number of units of output

Question 12

capacity utilisation

Answer 12

actual output
——————————- x100
maximum possible output

Question 13

Return on investment

Answer 13

profit for the investment
————————– x 100
cost of the investment

Question 14

gross profit

Answer 14

revenue - cost of sales

Question 15

profit from operations

Answer 15

gross profit - operating expenses

Question 16

profit for the year

Answer 16

operating profit + profit from other activities - net finance costs - tax

Question 17

gross profit margin

Answer 17

gross profit
———— x100
revenue

Question 18

profit from operating margin

Answer 18

operating profit
————- x100
revenue

Question 19

profit for the year margin

Answer 19

profit for year
————- x100
revenue

Question 20

variance

Answer 20

budget figure - actual figure

Question 21

contribution per unit

Answer 21

selling price - variable costs per unit sold

Question 22

total contribution

Answer 22

contribution per unit x units sold

Or

total rev - total variable costs

Question 23

break even output

Answer 23

contribution per unit

Question 24

margin of safety

Answer 24

actual level of output - break even level of output

Question 25

Labour turnover

Answer 25

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

Question 26

employee retention rate for a particular time period

Answer 26

number of employees who remained with the business for the whole period of time ----------------------------------- x100 number of employees at start of the time period

Question 27

employee costs as percentage of turnover

Answer 27

employee costs ----------------- x100 turnover

Question 28

Labour cost per unit

Answer 28

labour costs --------------------- units of output

Question 29

return on capital employed

Answer 29

operating profit ---------------------- x100 total equity + non current liabilities

Question 30

current ratio

Answer 30

current assets ------------------- current liabilities

Question 31

gearing

Answer 31

non current liabilities ----------------------------- x100 total equity + non current liabilities

Question 32

payables days

Answer 32

payables -------------- x365 cost of sales

Question 33

receivables days

Answer 33

receivables ------------- x 365 revenue

Question 34

inventory turnover

Answer 34

cost of sales --------------------- average inventories held

Question 35

average rate of return

Answer 35

average annual return (£) --------------------------------- initial cost of project (£)

Question 36

ped

Answer 36

% change in quantity demand ------------------------------------------- % change in price