formulas

Question 1

profit margin

Answer 1

profit /
revenue (x 100)

Question 2

Return on capital employed (ROCE)

Answer 2

operating profit /
Capital employed ( x 100)

Question 3

Capital employed

Answer 3

Equity + long term debt

Question 4

Inventory turnover

Answer 4

cost of sales/
inventory

Question 5

Recieveable days

Answer 5

Trade recieveables/revenue (x365)

Question 6

Payables days

Answer 6

Trade payables / cost of sales (x 365)

Question 7

Current ratio

Answer 7

Current assests / current liabilities :1

Question 8

Gearing ratio

Answer 8

Non current liabilities / capital employed (x 100)

Question 9

working capital

Answer 9

current assets - current liabilities

Question 10

Average rate of return

Answer 10

Net return of project or number of years/ initial cost of project x 100

Question 11

Labour cost per unit

Answer 11

Labour costs/unit of output

Question 12

Employee cost as a percentage of turnover

Answer 12

Employee costs/sales turnover x 100

Question 13

Employee retention (%) for a time period

Answer 13

Number of staff leaving during year/average number of staff employed by business during the year x 100

Question 14

Labour turnover (%)

Answer 14

Number of staff leaving during the year/average number of staff employed during the year x 100

Question 15

Profit for year margin (%)

Answer 15

Profit for year/sales revenue x 100

Question 16

Margin of safety

Answer 16

Actual level of output - break even level of output

Question 17

Total contribution

Answer 17

Contribution per unit x units produced or sold

Question 18

Total contribution

Answer 18

Total revenue - variable costs

Question 19

Contribution per unit

Answer 19

Selling price - variable costs per unit

Question 20

Variance

Answer 20

Actual - budgeted

Question 21

Profit for the year

Answer 21

Operating profit + other profit - net finance costs - tax

Question 22

Gross profit

Answer 22

Sales revenue - cost of sales

Question 23

Operating profit

Answer 23

Sales revenue - cost of sales - operating costs

Question 24

Return on investment

Answer 24

Return on investment/cost of investment x 100

Question 25

Capacity utilisation

Answer 25

Actual output in given time period/ maximum output x 100

Question 26

Unit costs

Answer 26

Total costs of production/ number of units of output produced

Question 27

Labour productivity

Answer 27

Output per time period/ number of employees

Question 28

Added value

Answer 28

Sales revenue - cost of brought in goods and services

Question 29

Price elasticity of demand

Answer 29

% change in quantity demanded/% change in price x 100

Question 30

Income elasticity of demand

Answer 30

% change in quantity demanded/ % change in income x 100

Question 31

Market share (%)

Answer 31

Sales of product or brand or biz/ total sales in market x 100

Question 32

Sales growth % in year X

Answer 32

Change in sales product between year (X-1) and X/ sales of product in year (X-1) x 100

Question 33

Market growth (%) in year X

Answer 33

Change in size of market between year (X-1) and X/ size of market in year (X-1) x 100

Question 34

Net gain (decision tree)

Answer 34

Expected value - initial cost of decision

Question 35

Market capitalisation

Answer 35

Number of issued shares x current share price

Question 36

Sales revenue or turnover

Answer 36

Selling price per unit x number of units sold

Question 37

Total variable costs

Answer 37

Variable cost per unit x number of units sold

Question 38

Profit

Answer 38

Total revenue - total costs

Question 39

Total costs

Answer 39

Fixed + variable costs

Question 40

% change

Answer 40

old - new / old x 100