Maths Equations

Question 1

Break even output?

Answer 1

Fixed costs / contribution per unit

Question 2

Contribution per unit?

Answer 2

Selling price per unit - variable cost per unit

Question 3

Revenue?

Answer 3

Price x quantity sold.

Question 4

Total costs?

Answer 4

Fixed costs + variable costs

Question 5

Profit?

Answer 5

Total revenue - total costs

Question 6

Total variable costs?

Answer 6

Variable costs per unit X no. Of units sold

Question 7

Expected value?

Answer 7

Probability of outcome X percentage of success/failure.

Question 8

Net gain ?

Answer 8

Expected value - initial costs.

Question 9

Market growth (%) ?

Answer 9

New Market size- old Market size
——————————————— x100
Old market size.

Question 10

Market share (%)?

Answer 10

Sales
——— x100
Total market size

Question 11

Sales growth (%)?

Answer 11

Sales this year - sales last year
——————————————- X100
Sales last year

Question 12

Added value?

Answer 12

Sales revenue- cost of bought in goods/services

Question 13

Capacity utilisation(%)?

Answer 13

Output
————- x100
Maximum capacity

Question 14

Unit costs?

Answer 14

Total costs
———————
Unit costs

Question 15

Labour productivity?

Answer 15

Output per period
——————————-
No. Of workers per period.

Question 16

Labour turnover?

Answer 16

No. Of employees leaving over a given period
————————————————————— x100
Average no. Of employees over a given period

Question 17

Retention rate?

Answer 17

No. Of employees with 1 or more years service
—————————————————————— x100
Overall workforce numbers

Question 18

Labour costs per unit?

Answer 18

Total labour costs
————————-
Total units of output.

Question 19

Re order level?

Answer 19

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

Question 20

Return on investment(%)?

Answer 20

Return on investment (£)
——————————— x100
Cost of investment (£)

Question 21

Gross profit?

Answer 21

Sales revenue - cost of sales

Question 22

Operating profit?

Answer 22

Sales revenue- cost of sales - operating expenses

Question 23

Profit for the year?

Answer 23

Operating profit + other profit - net finance - tax.

Question 24

Gross profit margin(%)?

Answer 24

Gross profit
——————- x100
Sales revenue

Question 25

Operating profit margin (%)?

Answer 25

Operating profit
———————— x 100
Sales revenue

Question 26

Net cash flow?

Answer 26

Cash inflows - cash outflows

Question 27

Closing balance?

Answer 27

Opening Balance + net cash flow.

Question 28

Total contribution?

Answer 28

Total revenue - total variable costs OR contribution per unit x units sold.

Question 29

Margin of safety?

Answer 29

Actual output - breakeven output.

Question 30

Employees costs as a % of turnover?

Answer 30

Employee costs
———————x100
Sales turnover

Question 31

Net gain?

Answer 31

Add the EV’S for each outcome and then subtract the initial costs.