Theme 2 Formula

Question 1

Net cash flow

Answer 1

Total inflows - total outflows

Question 2

Sales volume

Answer 2

Total number of units sold over a period of time

Question 3

Sales revenue

Answer 3

Number of units sold x unit price

Question 4

Total variable costs

Answer 4

Number of units sold x variable cost per unit

Question 5

Total costs

Answer 5

Fixed costs + variable costs

Question 6

Contribution per units

Answer 6

Contribution per unit x number of units sold

Question 7

Break-even

Answer 7

Fixed costs/ contribution per unit

Question 8

Variance

Answer 8

Actual-budget

Question 9

Gross profit

Answer 9

Sales revenue minus overheads

Question 10

Net profit

Answer 10

Operating profit +/- finance costs

Question 11

Gross profit margin

Answer 11

(Gross profit/ sales revenue) x100

Question 12

Operating profit margin

Answer 12

(Operating profit/ sales revenue) x 100

Question 13

Profit for the year (net profit) margin

Answer 13

(Profit for the year/ sales revenue) x100

Question 14

Current ratio

Answer 14

Current assets/ current liabilities

Question 15

Acid test ratio

Answer 15

(Current assets-stock) / current liabilities

Question 16

Productivity (labour)

Answer 16

Output per period (units)/ number of employees in that period

Question 17

Capacity utilisation

Answer 17

(Actual level of output/ maximum possible output) x100

Question 18

Contribution per unit

Answer 18

Selling price per unit - Variable cost per unit

Question 19

Operating profit

Answer 19

Gross profit minus overheads