Numeracy and quantitative skills

Question 1

Break-even - Output

Answer 1

Break-even output = fixed costs/contribution

Question 2

Break-even - Margin of safety

Answer 2

The margin of safety = current output - break-even output

Question 3

Capacity Utilisation

Answer 3

(Actual output / Maximum possible output) × 100

Question 4

Contribution

Answer 4

Selling price − variable costs

Question 5

Total Costs

Answer 5

Fixed costs + Variable costs

Question 6

Variable costs

Answer 6

Variable cost per unit × Number of units sold

Question 7

Investment appraisal - ARR

Answer 7

Average annual return / Initial cost (£) × 100

Question 8

Investment appraisal - NPV

Answer 8

Present Value – cost of investment

Question 9

Labour - Costs per unit

Answer 9

Labour costs / Units of output

Question 10

Labour - Employee cost as a percentage of turnover

Answer 10

Employee costs / Turnover
× 100

Question 11

Labour - Employee retention rate

Answer 11

Current number of employees /Number of employees at the start of the time period ×100

Question 12

Labour Productivity

Answer 12

Output / Number of employees

Question 13

Labour turnover

Answer 13

Number of staff leaving / Number of staff employed by the business × 100

Question 14

Market capitilisation

Answer 14

Number of issued shares × Current share price

Question 15

Market growth rate

Answer 15

Change in the size of the market over a period / Original size of the market × 100

Question 16

Market share

Answer 16

Sales of one product OR brand OR business / Total sales in the market × 100

Question 17

Gross Profit

Answer 17

Revenue − Cost of Sales

Question 18

Operating Profit

Answer 18

Gross profit − Operating Expenses

Question 19

Capital employed

Answer 19

Total equity + non-current liabilities

Question 20

Gearing

Answer 20

Non-current liabilities/ Cap employed x100

Question 21

Gross Profit margin

Answer 21

Gross Profit / Revenue
× 100

Question 22

Inventory turnover

Answer 22

Cost of sales / Average inventories held

Question 23

Operating profit margin

Answer 23

Operating Profit / Revenue
× 100

Question 24

Payable days

Answer 24

Payables / Cost of sales × 365

Question 25

Profit for the year margin

Answer 25

Profit for year / Revenue
× 100

Question 26

Receivable days

Answer 26

Receivables/Revenue × 365

Question 27

Return on investment

Answer 27

Profit from the investment (£) /Cost of the investment (£) × 100

Question 28

Unit costs

Answer 28

Total costs / Number of units of output

Question 29

Variances

Answer 29

Budgeted figure – the actual figure

Question 30

Profit

Answer 30

Total revenue − Total costs

Question 31

Revenue (Sales or turnover)

Answer 31

Selling price per unit × Number of units sold

Question 32

ROCE

Answer 32

Operating profit / Capital employed x100

Question 33

Operating profit

Answer 33

Sales Revenue - Cost of Sales - Operating Expenses