Formulas

Question 1

Revenue (Sales or Turnover)

Answer 1

Selling price per unit x number of units sold

Question 2

Variable costs (total variable costs)

Answer 2

Variable cost per unit x number of units sold

Question 3

Total costs

Answer 3

fixed costs + variable costs

Question 4

Profit

Answer 4

total revenue - total cost

Question 5

Market capitalisation of a business

Answer 5

Number of issued shares x current share price

Question 6

Added value

Answer 6

Sales revenue - costs of bought in goods and services

Question 7

Labour productivity

Answer 7

Output per time period / number of employees

Question 8

Unit costs (average costs)

Answer 8

Total costs / number of units of output

Question 9

Return on investment (%)

Answer 9

Profit from investment / cost of investment x 100

Question 10

Gross profit

Answer 10

Revenue - cost of sales

Question 11

Profit from operations

Answer 11

gross profit - operating expenses

Question 12

Profit for year

Answer 12

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

Question 13

Gross profit margin (%)

Answer 13

Gross profit/sales revenue x 100

Question 14

Profit from operations margin

Answer 14

Operating profit / revenue x 100

Question 15

Profit for year margin(%)

Answer 15

profit for the year/revenue x 100

Question 16

Variance

Answer 16

budgeted figure - actual figure

Question 17

Contribution per unit

Answer 17

Selling price - variable cost per unit

Question 18

Total contribution

Answer 18

Contribution per unit x number of units sold

Question 19

Break even output

Answer 19

Fixed costs / contribution per unit

Question 20

Employee costs as a percentage of turnover

Answer 20

Employee costs / sales turnover x 100

Question 21

Labour costs per unit

Answer 21

Labour costs / units of output

Question 22

Return on capital employed

Answer 22

operating profit / total equity + non current liabilities x 100

Question 23

Labour turnover (%)

Answer 23

Number of staff leaving / number of staff employed by the business x 100

Question 24

Current Ratio

Answer 24

current assets / current liabilities

Question 25

Gearing %

Answer 25

Non-current liabilities / Total Equity + Non-current liabilities x 100

Question 26

Payables days

Answer 26

payables/cost of sales x 365

Question 27

Receivable days

Answer 27

Receivables / sales revenue x 365

Question 28

Average rate of return (%)

Answer 28

Average annual return / initial cost of project x 100

Question 29

Gross Profit

Answer 29

net sales - cost of goods sold

Question 30

operating profit

Answer 30

Gross Profit - Expenses

Question 31

Gross Profit Margin

Answer 31

Gross profit/sales revenue x 100

Question 32

Net Profit Margin

Answer 32

Net profit/sales revenue x 100

Question 33

Current Ratio

Answer 33

current assets divided by current liabilities

Question 34

ROCE ratio

Answer 34

Operating profit / capital employed x 100

Question 35

Gearing ratio

Answer 35

non-current liabilities/capital employed x 100

Question 36

Payable Days Formula

Answer 36

(Payables / cost of sales) x 365

Question 37

Receivable days

Answer 37

Receivables / sales revenue x 365

Question 38

Inventory Turnover Ratio

Answer 38

cost of goods sold/average inventory

Question 39

Capital employed

Answer 39

Total equity + non current liabilities

Question 40

Total equity

Answer 40

Retained profit + share capital

Question 41

Net gain

Answer 41

Expected value - initial cost of decision

Question 42

Capacity utilisation (%)

Answer 42

actual output / maximum possible output x 100

Question 43

margin of safety

Answer 43

Actual output - break even output

Question 44

Employee retention rate (%) for a particular time period

Answer 44

Number of employees who remained with the business for the whole period of time / Number of employees at start of time period x 100

Question 45

Inventory turnover

Answer 45

cost of sales / average inventory held

Question 46

Cost of Goods Sold

Answer 46

beginning inventory + purchases - ending inventory