Formulas

Question 1

Percentage change increase

Answer 1

Increase equals new number take away original number
increase divided by original number x one hundred

Question 2

Percentage change decrease

Answer 2

decrease equals original number take way new number
decrease divided by original number x one hundred

Question 3

THEME ONE: PED

Answer 3

change in quantity demanded divided by change in price
greater than minus one equals elastic
lower than minus one equals inelastic

Question 4

THEME ONE: YED

Answer 4

change in quantity demanded divided by change in income
positive figure less than one equals normal good
positive figure more than one equals luxury good
negative figure equals inferior good

Question 5

THEME ONE: Market Share

Answer 5

total sales of firm divided by total sales in market x one hundred

Question 6

THEME TWO: Sales Revenue

Answer 6

selling price x sales volume

Question 7

THEME TWO: Sales Volume

Answer 7

sales revenue divided by selling price

Question 8

THEME TWO: Contribution per unit

Answer 8

selling price per unit take away variable costs per unit

Question 9

THEME TWO: Total Contribution

Answer 9

contribution per unit x number of units sold

Question 10

THEME TWO: Profit or Loss

Answer 10

total contribution take away fixed costs
or total revenue take away total costs

Question 11

THEME TWO: Budget Variance

Answer 11

actual figure take away budgeted figure

Question 12

THEME TWO: Break even point

Answer 12

where total revenue equals total costs

Question 13

THEME TWO: Break even output

Answer 13

total fixed costs divided by contribution per unit

Question 14

THEME TWO: Margin of safety

Answer 14

current sales volume or output take away break even output

Question 15

THEME TWO: Gross profit

Answer 15

revenue take away total variable costs

Question 16

THEME TWO: Operating profit

Answer 16

gross profit take away fixed costs

Question 17

THEME TWO: Net profit for year

Answer 17

operating profit plus or minus finance costs or income

Question 18

THEME TWO: Gross profit margin

Answer 18

gross profit divided by revenue x one hundred

Question 19

THEME TWO: operating profit margin

Answer 19

operating profit divided by revenue x one hundred

Question 20

THEME TWO: Net profit margin

Answer 20

Net profit divided by revenue x one hundred

Question 21

THEME TWO: Current ratio

Answer 21

Current assets divided by current liabilities

Question 22

THEME TWO: Acid ratio

Answer 22

current assets take away stocks divided by current liabilities

Question 23

THEME TWO: Working capital

Answer 23

current assets take away current liabilities

Question 24

THEME TWO: Net cash flow

Answer 24

cash inflow take away cash outflow

Question 25

THEME TWO: Labour productivity

Answer 25

output per time period divided by number of employees at work

Question 26

THEME TWO: Capacity utilisation

Answer 26

actual output divided by maximum possible output x one hundred

Question 27

THEME THREE: Total capital employed

Answer 27

total equity plus non current liabilities

Question 28

THEME THREE: Gearing ratio

Answer 28

non current liabilities divided by total capital employed x one hundred low gearing equals blow thirty percent high gearing equals over sixty percent

Question 29

THEME THREE: ROCE

Answer 29

operating profit or statement of comprehensive income divided by total capital employed or statement of financial position x one hundred

Question 30

THEME THREE: Absenteeism rate

Answer 30

total number absent per period divided by average number of employees per period x one hundred

Question 31

THEME THREE: Labour turnover

Answer 31

total number of employees leaving per period divided by average number of employees per period x one hundred

Question 32

THEME THREE: Labour retention rate

Answer 32

total number of employees remaining per period divided by average number of employees per period x one hundred

Question 33

THEME THREE: ARR

Answer 33

average annual profit divided by investment cost x one hundred

Question 34

THEME THREE: NPV

Answer 34

total discounted returns take away investment cost