All Business Formulas

Question 1

Market Share

Answer 1

Business’s total sales/Total sales in whole market

Question 2

Market Growth

Answer 2

Market size year 2 - Market size year 1 / Market size year 1 x 100

Question 3

YED

Answer 3

% change in quantity demanded / % change in income

Question 4

PED

Answer 4

% change in quantity demanded / % change in price

Question 5

Sales growth

Answer 5

Sales year 2 - Sales year 1 / Sales year 1 x 100

Question 6

Expected value

Answer 6

(Probability success x pay off) + (probability failure x pay off)

Question 7

Net gain

Answer 7

Expected value - cost of choice

Question 8

Profit

Answer 8

Total revenue - Total costs

Question 9

Revenue

Answer 9

Selling price x quantity sold

Question 10

Fixed costs

Answer 10

Total revenue - Total variable costs - profit

Question 11

Variable costs

Answer 11

Total revenue - Total fixed costs - profit

Question 12

Total costs

Answer 12

Fixed + variable costs

Question 13

Market capitalisation

Answer 13

Number of shares sold X share prices TODAY

Question 14

Capacity Utilisation

Answer 14

Current Capacity / Maximum Total Capacity x 100

Question 15

Average unit costs

Answer 15

Total costs / Total Output

Question 16

Labor Productivity

Answer 16

Total Output / Number of Employees

Question 17

Break-Even (1)

Answer 17

Total Revenue = Total costs

Question 18

Break Even (2)

Answer 18

Fixed costs / Contribution

Question 19

Contribution per unit

Answer 19

Selling price - variable cost per item

Question 20

Margin of safety

Answer 20

Actual sales - break-even level of sales

Question 21

Gross profit

Answer 21

Revenue - Cost of Goods old (basically variable costs)

Question 22

Gross profit margin

Answer 22

Gross profit / revenue X 100

Question 23

Operating profit

Answer 23

Gross profit - Operating expenses

Question 24

Operating profit margin

Answer 24

Operating profit / Revenue X 100

Question 25

Profit for the year

Answer 25

Operating profit - All expenses (including taxation)

Question 26

Profit for the year margin

Answer 26

PFTY / Revenue X 100

Question 27

Labour turnover

Answer 27

Number of staff leaving / Number of staff employed by the business x 100

Question 28

Employee costs as a % of turnover

Answer 28

Employee costs / Turnover (sales revenue) x 100

Question 29

Labour costs per unit

Answer 29

Labour costs / Units of output

Question 30

ROI

Answer 30

profit (or loss) / initial investment

Question 31

ROCE

Answer 31

Operating Profit / Capital Employed X 100

Question 32

Capital Employed

Answer 32

Total Equity + Non-Current Liabilities

Question 33

Total Equity

Answer 33

Total assets - total liabilities

Question 34

Current ratio

Answer 34

current assets / current liabilities

Question 35

Gearing

Answer 35

Non Current liabilities / total equity + non current liabilities x100

Question 36

Payables days

Answer 36

Payables / cost of sales X 365

Question 37

Receivables days

Answer 37

Recievables / Revenue X 100

Question 38

Inventory turnover

Answer 38

costs of sales / average inventory

Question 39

Net cash flow

Answer 39

Inflows - outflows

Question 40

opening balance

Answer 40

closing balance from the previous year

Question 41

closing balance

Answer 41

Net cash flow + opening balance

Question 42

ARR

Answer 42

Average annual profit / initial investment X 100

Question 43

Float time

Answer 43

LFT - EST - DURATION

Question 44

Variance

Answer 44

Budgeted amount - actual amounts

Question 45

Employee retention rate

Answer 45

Number of employees who remained with the business for the whole period of time/ Number of employees at start of the time period ×100