Business: Formulas

Question 1

Revenue

Answer 1

Revenue =
price * quantity

Question 2

Break Even

Answer 2

Break even points in units =
fixed cost / (sales price-variable cost)

Question 3

Margin of safety

Answer 3

Margin of safety =
actual or budgeted sales - break of sales

Question 4

Interest (on loans)

Answer 4

Interest (on loans) in % =
total repayment - borrowed amount/borrowed amount *100

Question 5

Net cash - flow

Answer 5

Net cash - flow =
cash inflows - cash outflows in a given period

Question 6

Opening balance

Answer 6

Opening balance =
closing balance of the previous month

Question 7

Closing balance

Answer 7

Closing balance =
opening balance +/- net cash flow

Question 8

Gross profit

Answer 8

Gross profit =
sales revenue - cost of sales

Question 9

Gross profit margin

Answer 9

Gross profit margin (%) =
gross profit / sales revenue

Question 10

Net profit

Answer 10

Net profit =
gross profit - other operating expenses and interest

Question 11

Net profit margin

Answer 11

Net profit margin (%) =
net profit / sales revenue * 100

Question 12

Average rate of return

Answer 12

Average rate of return (%) =
average annual profit (total profit) / cost of investment * 100