Formulas

Question 1

Revenue

Answer 1

Selling price x number of units sold

Question 2

Variable costs

Answer 2

Variable cost per unit x units sold

Question 3

Total Costs

Answer 3

Fixed costs + variable costs

Question 4

Profit

Answer 4

Total revenue - total costs
OR
total contribution - fixed costs

Question 5

Market cap

Answer 5

Shares issued x share price

Question 6

Net gain

Answer 6

Expected value - initial cost of decision

Question 7

Market growth

Answer 7

Change in the size of the market/original size of the market x100

Question 8

Market share

Answer 8

Sales of one product OR brand OR business/ total sales in the market x100

Question 9

Added value

Answer 9

Sales revenue - cost of bought in goods and services

Question 10

Labour productivity

Answer 10

Output/ number of employees

Question 11

Unit costs

Answer 11

Total costs / number of units of output

Question 12

Capacity utilisation

Answer 12

Actual output/maximum possible output x100

Question 13

Return in investment

Answer 13

Profit from the investment / cost of the investment x100

Question 14

Gross profit

Answer 14

Revenue - cost of sales

Question 15

Operating profit

Answer 15

Gross profit - operating costs

Question 16

Profit for the year

Answer 16

Operating profit + profit from other activities - net finance costs - tax

Question 17

GPM

Answer 17

Gross profit/revenue x100

Question 18

OPM

Answer 18

Operating profit/ revenue x100

Question 19

PFTYM

Answer 19

Profit for the year / revenue x100

Question 20

Variance

Answer 20

Budgeted figure - actual figure

Question 21

Contribution per unit

Answer 21

Selling price - variable costs per unit

Question 22

Total contribution

Answer 22

Contribution per units x units sold

OR

Total revenue - total variable costs

Question 23

Break even output

Answer 23

Fix3d costs / contribution per unit

Question 24

Margin of safety

Answer 24

Actual level of output - break even output

Question 25

Labour turnover

Answer 25

Staff leaving / number of staff employed

Question 26

Employee retention rate

Answer 26

Number of employees who remained / number of employees

Question 27

Employee costs as a percentage of turnover

Answer 27

Employee costs / turnover x100

Question 28

Labour costs per unit

Answer 28

Labour costs / units of output

Question 29

ROCE

Answer 29

Operating profit / total equity + non current liabilities x100

Question 30

Capital employed

Answer 30

Total equity + non current liabilities

Question 31

Current ratio

Answer 31

Current assets / current liabilities

Question 32

Gearing

Answer 32

Non current liabilities / total equity + non current liabilities

Question 33

Payable days

Answer 33

Payables / cost of sales x 365

Question 34

Receivable days

Answer 34

Receivables / revenue x 365

Question 35

Inventory turnover

Answer 35

Costs of sales / average inventories held

Question 36

Average rate of return

Answer 36

Average annual return / initial cost of project x100