Mock Exam Flashcards
Formula for gross profit
Gross profit = sales revenue - cost of goods sold
Cost of goods: beginning inventory + purchases - ending inventory
Formula for operating profit
Gross profit - operating expenses
Operating margin formula
Operating profit / sales revenue x 100
Straight line depreciation charge per year formula
(Cost - residual value) / useful life
Current ratio formula
Current assets / current liabilities
Gross profit margin
(Revenue - cost of sales) / revenue
Quick ratio formula
Current assets - inventory / current liabilities
ROCE Formula
Operating profit / (total assets - current liabilities)
Gearing formula
Long term debt / (long term debt + equity)
Profit before tax formula
gross profit - operating
Gross profit
Revenue - cost of sales expenses
Examples of operating expenses
Wages & salaries, advertising, insurance, rent expense
Prime costs formula
Direct material costs + direct labour costs
Total manufacturing costs formula
Prime costs + manufacturing overheads
Total sales units formula
Additional cost / contribution per unit
