ALL Equations

Question 1

ROI formula

Answer 1

(ROI / Cost of investment) X 100

Question 2

Percentage change in profit formula

Answer 2

(Current year’s profit - previous year’s profit) / previous year’s profit) X 100

Question 3

Gross profit formula

Answer 3

Gross profit = sales revenues - cost of sales

Question 4

Operating profit formula

Answer 4

Operating profit = gross profit - operating expenses

Question 5

Profit for the year formula

Answer 5

Profit for the year = operating profit - net finance costs - tax

Question 6

Operating profit margin formula

Answer 6

(Operating profit / sales revenue) X 100

Question 7

Net profit margin

Answer 7

(Net profit / sales revenue) X 100

Question 8

gross profit margin

Answer 8

(Gross profit)
——————– X100
sales revenue

Question 9

contribution per unit

Answer 9

selling price per unit - variable cost per unit

Question 10

total contribution formula

Answer 10

total revenue - TVC/contribution per unit X num of units sold

OR

total revenue - total variable costs

Question 11

Break even output formula

Answer 11

Fixed costs/contribution per unit(sp-vc)

Question 12

margin of safety formula

Answer 12

(actual output - break even output) / actual X100

Question 13

opening balance

Answer 13

same as closing balance of previous
amount of money at start
0 for new

Question 14

closing balance

Answer 14

net cash flow + opening balance

Question 15

net cash flow

Answer 15

total inflow - total outflow

Question 16

total outflow

Answer 16

add up all payments made

Question 17

total inflows

Answer 17

add up all the cash recieved

Question 18

revenue

Answer 18

selling price X number of units sold

Question 19

total variable costs

Answer 19

variable cost(per unit) X num of units sold

Question 20

TC

Answer 20

FC + TVC

Question 21

profit

Answer 21

total revenue - total costs
OR
total contribution -fixed costs

Question 22

market capitalisation

Answer 22

number of issued shares
X
current share price

Question 23

market growth

Answer 23

change in the size of a market
————————————————- X100
original size of the market

Question 24

market share

Answer 24

sales of one product/brand,/business
————————————————–X100
total sales in the market

Question 25

net gain

Answer 25

expected value - initial cost of decision

Question 26

added value

Answer 26

sales revenue - costs of bought in goods and services

Question 27

labour productivity

Answer 27

output over a period of time ------------------------------------------ number of employees

Question 28

Unit costs

Answer 28

Total costs —————————— Number of units of output

Question 29

Capacity utilisation (%)

Answer 29

Actual output ————————————x 100 Maximum possible output

Question 30

Variance

Answer 30

Budgeted figure - actual figure

Question 31

Profit for year margin (%)

Answer 31

Profit for year ——————-X100 Revenue

Question 32

Labour turnover (%)

Answer 32

Number of staff leaving —————————————X100 Number of staff employed by the business

Question 33

Employee retention rate (%) for a particular time period

Answer 33

Number of employees who remained with the business for the whole period of time —————————————————-X100 Number of employees at start of the time period

Question 34

Employee costs as percentage of turnover

Answer 34

Employee costs ———————× 100 Turnover

Question 35

Labour cost per unit

Answer 35

Labour costs —————— Units of output

Question 36

Return on capital employed (ROCE)(%)

Answer 36

Operating profit ———————— X100 Total equity + non-current liabilities Where total equity + non-current liabilities = capital employed

Question 37

Average rate of return (%)

Answer 37

Average annual return (£) ————————————X100 Initial cost of project (E)

Question 38

Payables days

Answer 38

Payables ————— X365 Cost of sales

Question 39

Receivables days

Answer 39

Receivables —————X365 Revenue