formulas

Question 1

Total costs =

Answer 1

Fixed costs + variable costs

Question 2

Profit =

Answer 2

Total revenue - Total costs

Question 3

Variable Costs =

Answer 3

variable costs per unit x number of units sold

Question 4

Total revenue =

Answer 4

Selling price per unit x number of units sold

Question 5

Market capitalisation of a business =

Answer 5

number of issued shared x current share price

Question 6

In a decision tree net gain =

Answer 6

Expected value - initial cost of decision

Question 7

Market size (volume)???

Answer 7

is the quantity of goods and services produced in a particular market over a period of times (usually one year)

Question 8

Market size (value)???

Answer 8

is the total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time (usually one year)

Question 9

Sales Volume????

Answer 9

is the quantity of goods and services produced by a particular business over a period of time (usually one year)

Question 10

Sales Value????

Answer 10

is the total sales revenue of a particular business over a period of time (usually one year)

Question 11

Market Growth % in year(x) =

Answer 11

size of the market in year (x-1)

Question 12

Sales growth % in year(x) =

Answer 12

Sales of product or business in year (x-1)

Question 13

Market share (%) =

Answer 13

Sales of one product or brand or business
————————————————————– x 100
Total sales in the market

Question 14

price elasticity of demand =

Answer 14

percentage change price

Question 15

Added value =

Answer 15

Sales revenue - costs of bought in goods and services

Question 16

labour productivity =

Answer 16

number of employees

Question 17

units costs =

Answer 17

number of units of output produced

Question 18

capacity utilisation (%) =

Answer 18

actual output in a given time period
——————————————————————- x 100
maximum possible output in a given time period

Question 19

return on investment (%) =

Answer 19

return on investment (£)
———————————– x 100
cost of the investment (£)

Question 20

Gross profit =

Answer 20

Sales Revenue - costs of sales

Question 21

profit from operations = operating profit =

Answer 21

sales revenue - costs of sales - operating expenses

Question 22

profit of year =

Answer 22

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

Question 23

contribution per unit =

Answer 23

selling price - variable costs per unit.

Question 24

1) total contribution =

2) total contribution =

Answer 24

1) contribution per unit x units produced or sold

2) total revenue - total variable costs

Question 25

break even output =

Answer 25

contribution per unit

Question 26

Margin of safety =

Answer 26

Actual level of output - breakeven level of output

Question 27

Gross profit Margin (%) =

Answer 27

gros profit
—————— x 100
Sales Revenue

Question 28

Profit from operations margin = operating profit margin (%) =

Answer 28

operating profit
———————– x 100
Sales Revenue

Question 29

Profit for year margin (%) =

Answer 29

profit for year
——————- x 100
Sales revenue

Question 30

Labour turnover (%) =

Answer 30

number of staff leaving during the year
—————————————————————————x 100
Average number of staff employed by the business during the year.

Question 31

Employee costs as percentage of turnover =

Answer 31

employee costs
———————- x 100
Sales Turnover

Question 32

Labour cost per unit =

Answer 32

units of output

Question 33

Return of capital employed (ROCE) (%) =

Answer 33

operating profit
————————————————- x 100
total equity + non-current liabilities