T2 Formulae

Question 1

Breakeven

Answer 1

Breakeven = FC / CPU

Question 2

Gross Profit

Answer 2

Gross profit = Sales revenue - cost of sales

Question 3

% Change

Answer 3

Percentage change = (NEW-OLD) / OLD x 100

Question 4

Net Cash Flow

Answer 4

Net Cash flow = Total Cash Inflow - Total Cash Outflow

Question 5

Sales Volume

Answer 5

Sales volume = total number of units sold over a period of time

Question 6

Sales Revenue

Answer 6

Sales revenue = number of units sold x unit price

Question 7

Total Variable Costs

Answer 7

Total variable costs = number of units sold x variable cost per unit

Question 8

Total Costs

Answer 8

Total costs = Fixed costs + variable costs

Question 9

Contribution per unit

Answer 9

Contribution per unit = Selling price per unit – Variable cost per unit

Question 10

Total Contribution

Answer 10

Total contribution = Contribution per unit x Number of units sold

Question 11

Profit Variance (Variance)

Answer 11

Variance = Actual – Budget

Question 12

Operating Profit

Answer 12

Operating profit = Gross profit - overheads

Question 13

Net Profit

Answer 13

Net profit = Operating Profit +/- finance costs

Question 14

Gross Profit Margin

Answer 14

Gross profit margin = (Gross profit / Sales revenue) x 100

Question 15

Operating Profit Margin

Answer 15

Operating profit margin = (Operating profit/ Sales revenue) x 100

Question 16

Net Profit Margin

Answer 16

Profit for the year (net profit) margin = (Profit for the year / Sales revenue) x 100

Question 17

Current Ratio

Answer 17

Current ratio = Current assets/ current liabilities

Question 18

Acid Test Ratio

Answer 18

Acid test ratio = (Current assets – stock) / current liabilities

Question 19

Productivity (labour)

Answer 19

Productivity (labour) = Output per period (units)/ Number of employees in that period

Question 20

Capacity Utilisation

Answer 20

Capacity utilisation = (Actual level of output/ Maximum possible output) x 100

Question 21

Productivity

Answer 21

Productivity = Outputs / Inputs per period

Question 22

Cost Per Unit (Unit Costs)

Answer 22

Cost Per Unit (Unit Costs) = Total Costs / Output (Units)

Question 23

Margin of safety ratio

Answer 23

Margin of safety (ratio) = Sales Revenue - Breakeven amount / sales revenue

Question 24

Margin of safety (amount)

Answer 24

Margin of safety (amount) = Sales revenue - breakeven revenue

Question 25

Margin of safety (unit)

Answer 25

Margin of safety (units) = Actual output (units) - Breakeven output