KEY CALCULATIONS

Question 1

How do you calculate total costs?

Answer 1

Fixed Costs + Variable costs

Question 2

How do you calculate profit?

Answer 2

Total revenue-Total Costs

Question 3

How do you calculate total variable costs?

Answer 3

variable costs per unit x number of units sold

Question 4

How do you calculate total revenue?

Answer 4

selling price per unit x number of units sold

Question 5

How do you calculate market capitalisation?

Answer 5

Number of issued shares x current share price

Question 6

How do you calculate Net gain on in a decision tree?

Answer 6

Expected value - initial cost of decision

Question 7

How do you calculate market growth in a year?

Answer 7

Change is size of the market between year (X-1) and year X ÷ Size of the market in year (X-1) X100

Question 8

How do you calculate sales growth in a year?

Answer 8

Change in sales of products or businesses between year (X-1) and year X ÷ Size of the market in year (X-1) X100

Question 9

How do you calculate market share?

Answer 9

Sales of one product/brand/business ÷ Total sales in the marker X 100

Question 10

How do you calculate price elasticity of demand?

Answer 10

Percentage change in quantity demand ÷ Total sales in the marker x100

Question 11

How do you calculate Labour productivity?

Answer 11

output per time period ÷ number of employees

Question 12

How do you calculate unit costs?

Answer 12

Total cost of production ÷ number of units of output produced

Question 13

How do you calculate capacity utilisation?

Answer 13

Actual output ÷ max possible output X100

Question 14

How do you calculate return on investment?

Answer 14

Return on investment ÷ Cost of investment X100

Question 15

How do you calculate Gross profit?

Answer 15

Sales revenue - cost of sales

Question 16

How do you calculate Operating profit?

Answer 16

Sales revenue - Cost of sales - operating expenses

Question 17

How do you calculate Profit for the year?

Answer 17

Operating profit + Other profit - net finance costs - tax

Question 18

How do you calculate contribution per unit?

Answer 18

Selling price - variable cost per unit

Question 19

How do you calculate total contribution?

Answer 19

total revenue - total variable costs

Question 20

How do you calculate BEO?

Answer 20

Fixed costs ÷ Contribution per unit

Question 21

How do you calculate margin of safety ?

Answer 21

Actual level of output - BE level of output

Question 22

How do you calculate gross profit margin?

Answer 22

Gross profit ÷ sales revenue X100

Question 23

How do you calculate labour turnover?

Answer 23

number of staff leaving during the year ÷ average number of staff employed during the year x 100

Question 24

How do you calculate employee retention rate?

Answer 24

Num of employees at end of period - number of leave÷ num of employees at end of period X100

Question 25

How do you calculate Labour costs per unit?

Answer 25

Labour costs ÷ unit of output

Question 26

How do you calculate ROCE?

Answer 26

Operating profit ÷ total equity + non current liabilities X100

Question 27

How do you calculate current ratio?

Answer 27

Current assets ÷ current liabilities

Question 28

How do you calculate Gearing?

Answer 28

Non current liabilities ÷ total equity + non current liabilities X100

Question 29

How do you calculate Payable days?

Answer 29

Payables ÷ cost of sales x365

Question 30

How do you calculate receivable days?

Answer 30

receivables ÷ sales revenue x365

Question 31

How do you calculate Inventory turnover ?

Answer 31

cost of goods sold ÷ average inventories held

Question 32

How do you calculate average rare of return?

Answer 32

num of years ÷ initial cost of project x100