Maths

Question 1

How do you calculate a percentage change?

Answer 1

New - old/ old x 100

Question 2

How do you calculate a new figure?

Answer 2

Percentage change x old/ 100 + previous figure

Question 3

How do you calculate profit for the year?

Answer 3

Operating profit + other profit - net finance costs - tax

Question 4

How do you calculate profit for the year margin?

Answer 4

Profit for the year / sales revenue x100

Question 5

How do you calculate gross profit?

Answer 5

Sales revenue - cost of sales

Question 6

How do you calculate gross profit margin

Answer 6

Gross profit / sales revenue x 100

Question 7

How do you calculate operating profit

Answer 7

Sales revenue - cost of sales - operating expenses

Question 8

How to calculate operating profit margin

Answer 8

Operating profit / sales revenue x 100

Question 9

How do you calculate current ratio (liquidity)

Answer 9

Current assets / current liabilities

Question 10

Acid test

Answer 10

Current assets - stock / current liabilities

Question 11

Gearing ratio

Answer 11

Non-current liabilities / total equity + non current liabilities x 100

Question 12

ROCE

Answer 12

Operating profit / total equity + non-current liabilities x 100

Question 13

Payables days

Answer 13

Payables (current liabilities or creditors) / cost of sales x 365

Question 14

Receivables days

Answer 14

Receivables (current assets or debtors) / sales revenue x365

Question 15

Inventory turnover

Answer 15

Cost of sales / cost of average stock held

Question 16

Average rate of return

Answer 16

Total net profit / no. of years / initial cost x100

Question 17

Net present value

Answer 17

Net return for each year x discount factor

Add all net return x discount factors, for each year up

Then minus the cost of the initial investment

Question 18

Payback

Answer 18

Amount still needed to payback / amount paid back in that year x 12

Remember to do the cumulative chart

Question 19

Labour turnover (%)

Answer 19

Number of staff leaving during the year / average number of staff employed during the year x 100

Question 20

Labour productivity

Answer 20

Output per period / number of employees

Question 21

Labour retention

Answer 21

Number of staff employed at end of period - number of leavers / number of staff employed at end of period X100

Low retention means the company only keeps a small % of their employees

Question 22

Employee costs as a % of turnover

Answer 22

Employee costs / sales turnover X100

Question 23

Labour cost per unit

Answer 23

Labour costs / units of output

Question 24

Unit costs

Answer 24

Total costs of production / units output

Question 25

Capacity

Answer 25

The maximum output with the resources currently available

Question 26

Capacity utilisation

Answer 26

Output / capacity X100

Question 27

Re-order level

Answer 27

Lead time (in days) X average daily usage + buffer stock level

Question 28

Break even output

Answer 28

Fixed costs / contribution per unit

Question 29

Margin of safety

Answer 29

Actual output - break even output

Question 30

Contribution per unit

Answer 30

Selling price - unit variable cost

Question 31

Total contribution

Answer 31

Total revenue - total variable costs OR Contribution per unit X number of units sold

Question 32

Return on investment

Answer 32

Return on investment / cost of investment X100

Question 33

Price elasticity of demand

Answer 33

%change in quantity demanded / %change in price

Question 34

Income elasticity of demand

Answer 34

%change in quantity demanded / %change in real income

Question 35

Total costs

Answer 35

Fixed costs + variable costs

Question 36

Profit

Answer 36

Total revenue - total costs OR Total contribution - fixed costs

Question 37

Variable costs (total variable costs)

Answer 37

Variable cost per unit x number of units sold

Question 38

Total revenue

Answer 38

Selling price per unit x number of units sold

Question 39

Market capitalisation

Answer 39

Number of issues shares x current share price

Question 40

Market size (volume)

Answer 40

Quantity of goods and services produced in a particular market / a period of time (usually one year)

Question 41

Market size (value)

Answer 41

Sales revenue in a market / time period (usually one year)

Question 42

Sales volume

Answer 42

Quantity of G&S produced by a business / time period (usually a year

Question 43

Sales value

Answer 43

Sales revenue of a business / time period (usually one year)

Question 44

Market share

Answer 44

Sales of business / total sales in market X100

Question 45

Added value

Answer 45

Sales revenue - cost of bought in G&S

Question 46

Convert between currencies E.g. €1.41 to £1 How to go from € to £

Answer 46

Divide the euros by 1.41

Question 47

Convert between currencies E.g. €1.41 to £1 How to go from £ to €

Answer 47

Multiply the pounds by 1.41

Question 48

+ of payback

Answer 48

Easy Quick Simple Help with cash flow

Question 49

- payback

Answer 49

Value of money changes over time So doesn't consider time value of money Encourages short termism Based on estimates

Question 50

+ of NPV

Answer 50

Considers time value of money Helps with decision making as businesses can reject projects with a negative NPV

Question 51

- of NPV

Answer 51

More complicated Discount rates are estimated

Question 52

+ of ARR

Answer 52

Tells you how much on average you'll get back each year Quick Easy Simple

Question 53

- of ARR

Answer 53

Doesn't consider time value of money Based on estimates Doesn't tell you how much each year specifically, only on average each year

Question 54

Total float time

Answer 54

LFT - duration - EST