Formulas

Question 1

Formula for gross profit ?

Answer 1

Gross profit - sales turnover - costs of goods sold

Question 2

Formula for net profit ?

Answer 2

Net profit - gross profit - expenses + other income

Question 3

Formula for sales revenue ?

Answer 3

Sales revenue - quantity sold * selling price

Question 4

Formula for cost of sales / cost of goods sold ?

Answer 4

Cost of goods sold - opening inventory + purchases - closing inventory

Question 5

Formula for straight line depreciation ?

Answer 5

Straight line depreciation - (historic value - residual value) / expected life

Question 6

Formula for net current assets (working capital ) ?

Answer 6

Net current assets (working capital ) - current assets - current liabilities

Question 7

Formula for net assets ?

Answer 7

Net assets - tot assets - total liabilities

Question 8

Formula for gross profit margin ?

Answer 8

Gross profit margin - gross profit / revenue * 100

Question 9

Formula for mark up ?

Answer 9

Mark up - gross profit / cost of sales *100

Question 10

Formula for net profit / profit margin ?

Answer 10

Net profit / profit margin - net profit / revenue *100

Question 11

Formula for return on capital employed (ROCE) ?

Answer 11

Net profit before tax / capital employed * 100

Question 12

Formula for current ratio ?

Answer 12

Current ratio - current assets / current liabilities

Question 13

Formula for liquid capital ratio ?

Answer 13

Liquid capital ratio - current assets - inventory / current liabilities

Question 14

Formula for trade receivable days ?

Answer 14

Trade receivable days - trade receivables / credit sales *365

Question 15

Formula for trade payable days ?

Answer 15

Trade payable days - trade payables / purchases * 365

Question 16

Formula for inventory turnover ?

Answer 16

Inventory turnover - average inventory /cost of sales * 365

Question 17

Formula for average inventory ?

Answer 17

Average inventory - opening + closing inventory / 2