Theme 2 formulas

Question 1

Equation for Net cash flow

Answer 1

Total inflows - Total outflows

Question 2

Equation for Sales volume

Answer 2

Total number of units sold over a period of time

Question 3

Equation for Sales revenue

Answer 3

Number of units sold x unit price

Question 4

Equation for Total variable costs

Answer 4

Number of units sold x variable cost per unit

Question 5

Equation for Total costs

Answer 5

Fixed costs + variable costs

Question 6

Equation for Contribution per unit

Answer 6

Selling price per unit - variable costs

Question 7

Equation for Total contribution

Answer 7

Contribution per unit x number of units sold

Question 8

Equation for Break-even

Answer 8

Fixed costs/contribution per unit

Question 9

Equation for Variance

Answer 9

Actual - budget

Question 10

Equation for Gross profit

Answer 10

Sales revenue - cost of sales

Question 11

Equation for Operating profit

Answer 11

Gross profit - overheads

Question 12

Equation for Net profit

Answer 12

Operating profit +/- finance costs

Question 13

Equation for Gross profit margin

Answer 13

Gross profit/sales revenue x 100

Question 14

Equation for Operating profit margin

Answer 14

Operating profit/sales revenue x 100

Question 15

Equation for Net profit margin

Answer 15

Net profit/sales revenue x 100

Question 16

Equation for Current ratio

Answer 16

Current assets/current liabilities

Question 17

Equation for Acid test ratio

Answer 17

Current assets - stock/current liabilities

Question 18

Equation for Productivity labour

Answer 18

Output per period/number of employees in that period

Question 19

Equation for Capacity utilization

Answer 19

Actual level of output/maximum possible output x 100