Calculations/Formulas

Question 1

What is the Total Costs formula?

Answer 1

Total costs = fixed costs + variable costs

Question 2

What is the sales revenue formula?

Answer 2

Sales revenue = selling price x sales volume

Question 3

What is the gross profit margin formula?

Answer 3

Gross profit margin = Gross profit/Revenue x 100

Question 4

What is the operating profit margin formula?

Answer 4

Operating profit margin = Operating profit/Revenue x 100

Question 5

What is the Profit of the year margin formula?

Answer 5

Profit of the year margin = Profit of the year/Revenue

Question 6

What is the Acid test ratio formula?

Answer 6

Acid test ratio = Current assets - inventory/Current liabilities

Question 7

What is the working capital formula?

Answer 7

Working capital = Current assets - current liabilities

Question 8

What is the Current ratio formula?

Answer 8

Curent ratio = Current assets/current liabilities

Question 9

What is a Working capital cycle?

Answer 9

CASH - Production costs - Finished stock - Sales (Receivables)

Question 10

What is the percentage change increase formula?

Answer 10

Increase = new number - original number

%ge increase = increase/original number x 100

Question 11

What is the percentage change decrease formula?

Answer 11

Decrease = original number - new number

%ge decrease = decrease/original number x 100

Question 12

What is the formula for PED?

Answer 12

PED = %ge change in quantity demanded/%ge change in price

Question 13

What is the formula for YED?

Answer 13

YEd = %ge change in quantity demanded/%ge change in income

Question 14

What is the formula for market share?

Answer 14

Market share % = Total sales of a firm/Total sales in a market x 100

Question 15

What is the formula for sales volume?

Answer 15

Sales volume = Sales revenue/Selling price

Question 16

What is the formula for Total Contribution

Answer 16

Total contribution = contribution per unit x number of units sold

Total contribution = sales revenue - total variable costs

Question 17

What is the formula for profit/loss?

Answer 17

Profit = total contribution - fixed costs

Or, profit = total revenue - total costs

Generally, the higher the better, depending on the firms objectives

Question 18

What is the formula for budget variance?

Answer 18

Actual figure - budgeted figure

Question 19

What is the formula for break-even point?

Answer 19

BEP = total revenue = total costs

Question 20

What is the formula for break even output?

Answer 20

Break even output = total fixed costs/contribution per unit

Question 21

What is the margin of safety formula?

Answer 21

Margin of safety = current sales volume/output - break even output

Question 22

What is the gross profit formula?

Answer 22

Gross profit = revenue - total variable costs (cost of sales)

Question 23

What is the operating profit formula?

Answer 23

Operating profit = gross profit - fixed costs/operating expenses (overheads/expenses)

Question 24

What is the net profit (for the year) formula?

Answer 24

Net profit for the year = operating profit +/- interst (finance costs or income)

Question 25

What is the net profit margin formula?

Answer 25

Net profit margin = net profit/revenue x 100

Question 26

What is the net cashflow formula?

Answer 26

Net cash flow = cash inflow - cash outflow

Question 27

What is the formula for productivity?

Answer 27

Labour productivity = output per time period/number of employees at work

Question 28

What is the formula for capacity utilisation?

Answer 28

Capacity utilisation = actual output/maximum possible output x 100

Question 29

What is the total capital employed formula?

Answer 29

Total capital employed = total equity + non-current liabilities

Question 30

What is the gearing ratio formula?

Answer 30

Gearing ratio = non-current liabilities/total capital employed x 100 OR Gearing ratio = non-current liabilities/total equity + non-current liabilities All figures can be found in statement of financial position Low gearing<30% High gearing>60%

Question 31

What is the ROCE % (return on capital employed) formula?

Answer 31

ROCE = operating profit/total capital employed x 100 Operating profit is found on the statement of comprehensive income Total capital employed can be calculated from the statement of financial position

Question 32

What is the absenteeism rate % formula?

Answer 32

Absenteeism rate % = total number of absent per period/average number employed per period x 100

Question 33

What is the formula for labour turnover?

Answer 33

Labour turnover rate % = total number of employees leaving per period/average number of employees per period x 100

Question 34

What is the labour retention rate % formula?

Answer 34

Labour retention rate % = total number of employees remaining per period/average number of employees per period x 100

Question 35

What is the centred moving average 3 month formula?

Answer 35

Centred moving average 3 month = 3 months added together/ 3

Question 36

What is the payback period formula?

Answer 36

Count the years till the initial cost is repaid If half way through a year do the amount of money left/the income of the next year x 12

Question 37

What is the average rate of return formula?

Answer 37

Average annual profit/investment cost x 100 Average annual profit = total returns - investment cost/project life

Question 38

What is the net present value formula?

Answer 38

NPV = total discounted returns - investment cost

Question 39

What is the Contribution per unit formula?

Answer 39

Contribution per unit = selling price per unit - variable costs per unit

Question 40

Profit formula

Answer 40

Profit = contribution - fixed costs