Formulas

Question 1

What is the equation for Net Gain?

Answer 1

Expected Value - Initial Cost Of Decision

Question 2

What is the equation for Market Capitalisation?

Answer 2

Number Of Issued Shares X Current Share Price

Question 3

What’s the equation for Return On Investment?

Answer 3

Profit Of Investment
Divided by
Cost Of Investment
X100

Question 4

What’s the equation for Contribution Per Unit?

Answer 4

Selling Price - Variable Cost Per Unit

Question 5

What’s the equation for Gearing?

Answer 5

Non-Current Liabilities
Divided by
Capital Employed
X100

Question 6

What’s the equation for Labour Turnover?

Answer 6

Number Of Staff Leaving
Divided By
Average Number Of Staff Employed
100X

Question 7

How do you calculate the Average Rate Of Return?

Answer 7

Average annual return
Divided by
Initial Cost Of Project
100X

Question 8

How do you calculate Capacity utilisation?

Answer 8

Actual Output
Divided by
Maximum Possible Output
X100

Question 9

How do you calculate the Gross Profit Margin?

Answer 9

Gross Profit
Divided by
Sales Revenue
100X

Question 10

What’s the formula for Revenue?

Answer 10

Selling Price Per Unit X Number Of Units Sold

Question 11

What the formula for (Total) Variable Cost

Answer 11

Variable Cost Per Unit X Number Of Units Sold

Question 12

Formula For Total Cost

Answer 12

Fixed Cost + Variable Cost

Question 13

What Is Profit?

Answer 13

Total Revenue - Total Costs

Question 14

How Do You Calculate Market Growth %

Answer 14

Change in size of market over a given period
Divided by
Original size of the market
X100

Question 15

How Do You Calculate Added Value?

Answer 15

Sales Revenue - Costs of bought-in goods and services

Question 16

What’s The Formula For Labour Productivity?

Answer 16

Output over a time period
Divided by
Number Of Employees

Question 17

How Do You Calculate Unit Costs (Average Costs)

Answer 17

Total Costs
Divided by
Number Of Units Of Output

Question 18

How Do You Calculate Gross Profit?

Answer 18

Revenue - Cost Of Sales

Question 19

How Do You Calculate Profit From Operations

Answer 19

Gross Profit - Operating Expenses

Question 20

How Do You Calculate Profit For The Year

Answer 20

Operating Profit + Profit From Other Activities - Net Finance Cost - Tax

Question 21

Profit from operations Margin %

Answer 21

Operating Profit
Divided by
Revenue
100X

Question 22

Profit For The Year Margin %

Answer 22

Profit for year
Divided by
Revenue
100X

Question 23

Calculate Variance

Answer 23

Budgeted Figure - Actual Figure

Question 24

Calculate Current Ratio

Answer 24

Current assets
Divided by
Current Liabilities

Question 25

Calculate Payables Days

Answer 25

Payables Divided by Cost Of Sales 365X

Question 26

Calculate Receivables Days

Answer 26

Receivables Divided By Revenue 365X

Question 27

Inventory Turnover

Answer 27

Cost Of Sales Divided By Average Inventories Held

Question 28

Labour Cost Per Unit

Answer 28

Labour Costs Divided By Units Of Output

Question 29

Employee Costs as Percentage Of Turnover %

Answer 29

Employee Costs Divided By Turnover X100