Theme 2 formulas

Question 1

sales revenue

Answer 1

selling price x quantity sold

Question 2

total costs

Answer 2

variable + fixed

Question 3

average costs

Answer 3

total costs / output

Question 4

profit

Answer 4

sales revenue - total costs

Question 5

unit contribution

Answer 5

selling price - variable costs

Question 6

total contribution

Answer 6

contribution per unit x quantity sold

Question 7

break even

Answer 7

fixed costs / contribution

Question 8

gross profit

Answer 8

revenue - cost of sales

Question 9

operating profit

Answer 9

gross profit - operating costs

Question 10

net profit

Answer 10

operating profit - interest

Question 11

gross profit margin

Answer 11

(gross profit / revenue) x100

Question 12

operating profit margin

Answer 12

(operating profit / revenue) x100

Question 13

net profit margin

Answer 13

(net profit / revenue) x100

Question 14

current ratio

Answer 14

current assets / current liabilities

Question 15

acid test ratio

Answer 15

(current assets - inventory) / current liabilities

Question 16

working capital

Answer 16

current assets - current liabilities

Question 17

capacity utilisation

Answer 17

(current output / max output) x100

Question 18

productivity

Answer 18

output / input per worker

Question 19

total variable cost

Answer 19

average variable cost x quantity sold

Question 20

sales volume

Answer 20

sales revenue / selling price

Question 21

margin of safety

Answer 21

actual sales - break even

Question 22

break even

Answer 22

fixed costs / contribution

Question 24

net cash flow

Answer 24

inflows - outflows

Question 25

opening balance

Answer 25

closing balance of last month

Question 26

closing balance

Answer 26

opening + net cash flow