Formulas

Question 1

Market size

Answer 1

Number of sales in an industry x Selling price

Question 2

Formula of Market share

Answer 2

Total sales of a firm \ total market Sales x 100

Question 3

Formula of price elasticity of demand

Answer 3

% change in quantity demand / % change in price

( All answers should be negative value )

Question 4

Formula of income elasticity of demand

Answer 4

% change in quantity demand / % change in income

Question 5

Formula of revenue

Answer 5

Number of units sold x selling price per unit

Question 6

Formula of total costs

Answer 6

Total fixed coats + total variable costs

Question 7

Formula of profit

Answer 7

Total revenue - total costs

Question 8

Formula of contribution per unit

Answer 8

Selling price per unit - variable cost per unit

Question 9

Formula of total contribution

Answer 9

Contribution per unit x No. of units

Question 10

Formula of break even

Answer 10

Fixed costs / contribution per unit

( Always in units not £’s)

Question 11

Formula of Margin safety

Answer 11

Actual level of output - Break even point

Question 12

Formula of Gross profit

Answer 12

Sales revenue - cost of Goods (opening stock + purchases - closing stock )

Question 13

Formula of Net profit

Answer 13

Gross profit - Expenses

Question 14

Formula of gross profit margin

Answer 14

Gross profit / sales revenue x 100

Question 15

Formula of Net profit margin

Answer 15

Net profit / sales revenue x 100

Question 16

Formula of labour productivity

Answer 16

Total output ( per time period )

__________________

Total number of employees ( per time period )

Question 17

Formula of labour labour absenteeism

Answer 17

Number of staff absent ( per time period )

________________________ X100

Total number of staff days worked ( per time period )

Question 18

Formula of labour turnover

Answer 18

Number of staff leaving
_________________ X100

Average number of staff employed

Question 19

Formula of added value

Answer 19

Value of output - Value (costs) of inputs

Question 20

Formula of capacity utilisation

Answer 20

Actual output

____________ X100

Maximum possible output

Question 21

Formula of Budget variance

Answer 21

Actual figure - Budgeted value = variance


( Answer is favourable or adverse )

Question 22

Formula of working capital

Answer 22

Current Assests - current liabilities

Question 23

Formula of capital employed

Answer 23

Long-term liabilities + shareholders capital

Question 24

Formula of depreciation ( straight line method )

Answer 24

Historical cost - residual value

_________________

Useful life of Asset

Question 25

Formula of current ratio

Answer 25

Current Assets
_________________

Current liabilities

Question 26

Formula of Acid test ratio

Answer 26

Current Assets - stocks

____________

Current liabilities

Question 27

Formula of Gearing

Answer 27

Long term liabilities ( non-current liabilities )

_____________ x100

Capital employed

Question 28

Formula of return on capital employed

Answer 28

Net profit before tax
______________ X100

Shareholders funds + long term liabilities

Question 29

Formula of 3 point moving average

Answer 29

Month A + Month B + Month C
_____________________
3



Then Again the last 3 number


Month B + Month C + Month D
________________

3