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Business flashcards > Numerical Booklet > Flashcards

Numerical Booklet Flashcards

1
Q

Percentage change formula

A

Change / original X100

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2
Q

Index number formula

A

Current year value / Base year value X100

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3
Q

Market share formula (sales volume or revenue)

A

Total sales revenue of the company / total sales revenue of the market X100

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4
Q

Market growth formula (sales volume or revenue)

A

Difference in total sales revenue of the market / original sales revenue of the market X100

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5
Q

PED formula

A

% change in quantity demanded / % change in price

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6
Q

YED formula

A

% change in quantity demanded / % change in income

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7
Q

Break even formula

A

Fixed cost / contribution per unit

Contribution per unit = selling price - variable costs

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8
Q

What is the purpose of market share?

A

To show the value or volume of a business sales in comparison to competitors

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9
Q

What is the purpose of market growth?

A

To show the percentage change in market size

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10
Q

What is the purpose of budget?

A

A financial plan that is put together considering future revenue and costs of a business

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11
Q

What are the types of variances?

A

1)Favourable (positive) - better than expected
2)Adverse (negative) - worse than expected

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12
Q

Favourable variance analysis (3)

A

1)actual figures are better than budgeted figure
2)cost lower than expected
3)Revenue/Profits higher than expected

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13
Q

Adverse variance analysis

A

1)actual figure lower than budget figure
2)cost are higher than expected
3)Revenue/profit Lower than expected

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14
Q

Net cash flow formula

A

Cash inflows - cash outflows

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15
Q

What is the opening balance equal to?

A

The closing balance of the previous month

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16
Q

Closing balance formula

A

Opening balance + Net cash flow

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17
Q

Formula for productivity

A

Productivity = total output / total inputs

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18
Q

What is the purpose of calculating profit margin?

A

To calculate what percentage of the businesses sales will return as profit

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19
Q

Profit margin formula

A

Profit / sales revenue X 100

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20
Q

Gross profit margin formula

A

Gross profit / sales revenue X 100

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21
Q

Formula for operating profit margin

A

Operating profit / sales revenue X 100

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22
Q

Formula for net profit margins

A

Net profit / sales revenue X 100

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23
Q

What is return of capital employed?

A

Calculates the return (profit) a business has made from the resources that is available to them

24
Q

Formula for ROCE

A

Operating profit / capital employed X100

25
Q

Formula for capital employed

A

Non current liabilities + total equity

26
Q

Total equity formula

A

Share capital + retained profit

27
Q

What is the purpose of gearing?

A

To calculate the proportion of capital that has been financed through debt

28
Q

What gearing ratio do businesses prefer?

A

-gearing ratio above 50% is high
-below 50% is perferable

29
Q

Gearing formula

A

Non current liabilities / capital employed X100

30
Q

What is the purpose of liquidity ratios?

A

Businesses ability to pay of short term debts

31
Q

Formula for current ratio

A

Current assets / current liabilities

32
Q

Acid test ratio formula

A

Current assets - inventories / current liabilities

33
Q

What is the purpose of cost plus pricing?

A

To ensure that the business makes a profit on each item sold as the selling price will exceed the costs at a chosen amount

34
Q

How to calculate selling price? (cost plus pricing)

A

Total cost+ (total cost x markup percentage)
times the percentage as a decimal

35
Q

What is labour turnover?

A

The rate at which employees leave a business in a time period
(Businesses aim for below 10%)

36
Q

Formula for labour turnover?

A

Number of staff leaving during period / average number employed during period X 100

Average number =taking a sum of the number of employees at the beginning and end and dividing by 2

37
Q

What is labour retention?

A

The rate of employees that stay with a business
(Business will aim for a high labour retention)

38
Q

Formula for labour retention

A

Number of staff staying (over a period of time) /average number of staff (in a time period) X100

39
Q

Benefits of a high labour retention

A

-reduce labour costs
-maintain a strong culture

40
Q

What is absenteeism?

A

The number of employees absent during a period
(Business will aim for a low figure)

41
Q

Problems with a high absenteeism

A

-reflects a weak culture
-fall in productivity
-high labour turnover in the long term

42
Q

Equation for absenteeism

A

Number of employees absent during period / Number employed during period X100

43
Q

What are exchange rates?

A

The value of one currency expressed in terms of another currency

44
Q

Mnemonic for exchange rates

A

SPICED
Strong
Pound
Imports
Cheaper
Exports
Dearer

WPIDEC
Weak
Pound
Imports
Dearer
Exports
Cheaper

45
Q

What is moving average?

A

Moving averages are used to smooth out data to identify trends over a specific period of time

46
Q

3 point moving average formula

A

(Value before + value of the year + value after ) / 3

47
Q

Formula for 4 point moving average

A

(Q1-Q4)+(Q2-Q5) / 8

48
Q

How to caclutate variation?

A

The difference between the actual sales volume and the trend
Actual sales volume - trend

49
Q

What is an Investment appraisal?

A

Helps a business makes a decision regarding a future investment

50
Q

What is an investment payback?

A

The time it takes for an investment to generate enough cash flow/ profit to recover the initial investment cost

51
Q

How to calculate investment payback?

A

Amount left to pay / NCF of the year X52

52
Q

What is average rate of return?

A

A way to measure how much profit an investment is expected to make each year compared to the initial investment

53
Q

How to calculate avreage rate of return?

A

(Average annual profit/ initial investment) X100

54
Q

How to calculate Average annual profit?

A

Total profit / number of years of investment

55
Q

What is net present value?

A

Used to calculate the total expected profit or loss from investment by taking into account the time value of money

56
Q

How to calculate net present value?

A

1)multiply the net return by the given discount factor (do for each year)
2)add each npv
3)subtract the intial investment from the NPV

57
Q

What is critical path?

A

Used to organise a series of tasks which makes up a whole project to ensure that the project can be completed as quickly as possible

Business flashcards (4 decks)

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