Calculations

Question 1

Market Share

Answer 1

company sales / market sales

Question 2

PED

Answer 2

% change in quantity demanded / % change in price

Question 3

YED

Answer 3

% change in quantity demanded / % change in income

Question 4

net cash flow

Answer 4

cash inflows - cash outflows

Question 5

opening balance

Answer 5

previous month’s closing balance

Question 6

closing balance

Answer 6

opening balance + net cash flow

Question 7

total cost

Answer 7

fixed costs + variable costs

Question 8

total revenue

Answer 8

selling price per unit * number of units sold

Question 9

total variable cost

Answer 9

variable cost per unit * output

Question 10

profit

Answer 10

total revenue - total costs

Question 11

profit (contribution method)

Answer 11

contribution - fixed costs

Question 12

breakeven output

Answer 12

fixed costs / contribution per unit

Question 13

contribution per unit

Answer 13

selling price - variable cost per unit

Question 14

total contribution (2 ways)

Answer 14

1. total revenue - total variable costs
2. contribution per unit * number of units sold

Question 15

budget variance

Answer 15

actual _ - budget _

_ = figure, revenue, costs, profits etc

Question 16

gross profit margin

Answer 16

(gross profit / revenue) * 100

Question 17

operating profit margin

Answer 17

(operating profit / revenue) * 100

Question 18

net profit margin

Answer 18

(net profit / revenue) * 100

Question 19

current ratio

Answer 19

current assets / current liabilities

Question 20

acid ratio

Answer 20

(current assets - inventories) / current liabilities

Question 21

labour productivity

Answer 21

output / number of inputs

Question 22

unit cost

Answer 22

total fixed costs + total variable costs / quantity of output

Question 23

capacity utilisation

Answer 23

(actual output/maximum output) * 100

Question 24

exchange rates

Answer 24

foreign to home: foreign / exchange rate
home to foreign: home * exchange rate

Question 25

payback

Answer 25

- calculate cash flow - calculate cumulative cash flow - do need/get for specific month

Question 26

ARR

Answer 26

((final cumulative cash flow value/number of years) / initial investment) * 100

Question 27

net present value

Answer 27

- cash flow * discount factor - add total

Question 28

decision trees

Answer 28

1. Determine the expected value (probability * financial outcome) 2. Add the expected values per branch 3. Subtract initial costs to work out net gain

Question 29

current assets

Answer 29

stock + debtors + cash

Question 30

net current assets

Answer 30

current assets - current liabilities

Question 31

return on capital employed + capital employed (2 calcs)

Answer 31

(operating profit / capital employed) * 100 capital employed calculations: - non-current liabilities + total equity - total assets - current liabilities

Question 32

gearing ratio

Answer 32

(non-current liabilities / capital employed ) *100

Question 33

labour turnover

Answer 33

(number of staff leaving / total number of staff ) * 100

Question 34

labour retention

Answer 34

(number of employees who stayed until end / number of employees at the start) * 100

Question 35

absenteeism

Answer 35

(number of days off / total number of working days) * 100

Question 36

3 point moving average

Answer 36

- add first 3 months then divide by 3 - repeat with every triplet

Question 37

4 period moving average

Answer 37

- calculate 4 month totals - add each 2 consecutive 4 period totals - divide answer by 8 - if needed, then do sales - moving average

Question 38

margin of safety

Answer 38

actual sales / breakeven output

Question 39

gross profit

Answer 39

revenue - cost of sales

Question 40

operating profit

Answer 40

gross profit - operating expenses

Question 41

net profit

Answer 41

total sales - all costs