equations

Question 1

What is the formula for Sales Revenue?

Answer 1

Sales Revenue = Selling Price × Quantity Sold

Question 2

What is the formula for Total Costs?

Answer 2

Total Costs = Fixed Costs + Variable Costs

Question 3

What is the formula for Average Cost?

Answer 3

Average Cost = Total Cost ÷ Output

Question 4

What is the formula for Profit?

Answer 4

Profit = Total Revenue − Total Costs

Question 5

What is the formula for Unit Contribution?

Answer 5

Unit Contribution = Selling Price − Variable Cost per Unit

Question 6

What is the formula for Total Contribution?

Answer 6

Total Contribution = Unit Contribution × Quantity Sold

Question 7

What is the formula for Break-even Output?

Answer 7

Break-even Output = Fixed Costs ÷ Contribution per Unit

Question 8

What is the formula for Gross Profit?

Answer 8

Gross Profit = Revenue − Cost of Sales

Question 9

What is the formula for Operating Profit?

Answer 9

Operating Profit = Gross Profit − Operating Costs

Question 10

What is the formula for Net Profit (Profit for the Year)?

Answer 10

Net Profit = Operating Profit − Interest and Exceptional Costs

Question 11

What is the formula for Gross Profit Margin?

Answer 11

Gross Profit Margin (%) = (Gross Profit ÷ Revenue) × 100

Question 12

What is the formula for Operating Profit Margin?

Answer 12

Operating Profit Margin (%) = (Operating Profit ÷ Revenue) × 100

Question 13

What is the formula for Net Profit Margin?

Answer 13

Net Profit Margin (%) = (Net Profit ÷ Revenue) × 100

Question 14

What is the formula for Current Ratio?

Answer 14

Current Ratio = Current Assets ÷ Current Liabilities

Question 15

What is the formula for Acid Test Ratio?

Answer 15

Acid Test Ratio = (Current Assets − Inventories) ÷ Current Liabilities

Question 16

What is the formula for Working Capital?

Answer 16

Working Capital = Current Assets − Current Liabilities

Question 17

What is the formula for Capacity Utilisation?

Answer 17

Capacity Utilisation (%) = (Actual Output ÷ Maximum Possible Output) × 100

Question 18

What is the formula for Labour Productivity?

Answer 18

Labour Productivity = Output per Period ÷ Number of Employees

Question 19

What is the formula for Unit Cost?

Answer 19

Unit Cost = Total Cost ÷ Output

Question 20

What is the formula for Budget Variance?

Answer 20

Budget Variance = Actual − Budgeted

Question 21

What is the formula for Return on Capital Employed (ROCE)?

Answer 21

ROCE (%) = (Operating Profit ÷ Capital Employed) × 100

Question 22

What is the formula for Labour Turnover?

Answer 22

Labour Turnover (%) = (Employees Leaving ÷ Average Number of Employees) × 100

Question 23

What is the formula for Retention Rate?

Answer 23

Retention Rate (%) = (Employees Remaining ÷ Average Number of Employees) × 100

Question 24

What is the formula for Market Share?

Answer 24

Market Share (%) = (Sales of Business ÷ Total Market Sales) × 100

Question 25

What is the formula for Sales Growth?

Answer 25

Sales Growth (%) = ((Current Sales − Previous Sales) ÷ Previous Sales) × 100

Question 26

What is the formula for Payback Period?

Answer 26

Payback Period = Initial Investment ÷ Annual Cash Inflow

Question 27

What is the formula for Average Rate of Return (ARR)?

Answer 27

ARR (%) = (Average Annual Profit ÷ Initial Investment) × 100

Question 28

What is the formula for Net Present Value (NPV)?

Answer 28

NPV = Σ (Cash Inflow ÷ (1 + Discount Rate)^t) − Initial Investment

Question 29

What is the formula for Margin of Safety?

Answer 29

Margin of Safety = Actual Sales − Break-even Sales

Question 30

What is the formula for Contribution Margin?

Answer 30

Contribution Margin = Sales Revenue − Variable Costs