Formulas

Question 1

Sales revenue

Answer 1

Selling price x Quantity sold

Question 2

Profit

Answer 2

P= T-T
Profits= Total costs- Total revenue

Question 3

Percentage change

Answer 3

Change / original
X 100

Question 4

What is the formula for calculating market share?

Answer 4

Market Share = (Sales of a Business / Total Sales in the Market) x 100

Question 5

What does PED stand for and how is it calculated?

Answer 5

PED = % Change in Quantity Demanded / % Change in Price

Question 6

What does YED represent and how is it calculated?

Answer 6

YED = % Change in Quantity Demanded / % Change in Income

Question 7

What is the breakeven point formula?

Answer 7

Breakeven = Total Fixed Costs / Contribution per Unit

Question 8

What is the formula for contribution?

Answer 8

Contribution = Selling Price - Variable Cost per Unit

Question 9

How is total contribution calculated?

Answer 9

Total Contribution = Contribution per Unit x Number of Units Sold

Question 10

What is the margin of safety formula?

Answer 10

Margin of Safety = Total Output - Breakeven Point

Question 11

How is gross profit calculated?

Answer 11

Gross Profit = Sales Revenue - Cost of Sale

Question 12

What is the formula for gross profit margin?

Answer 12

GP Margin = (Gross Profit / Sales Revenue) x 100

Question 13

What is operating profit and how is it calculated?

Answer 13

Operating Profit = Gross Profit - Expenses

Question 14

What is the formula for operating profit margin?

Answer 14

OP Margin = (Operating Profit / Sales Revenue) x 100

Question 15

How are total costs calculated?

Answer 15

T=C+C
Total Costs = Fixed Costs + Variable Costs

Question 16

What is the formula for total variable costs?

Answer 16

Total Variable = Total Costs - Fixed Costs

Question 17

How is total variable costs determined from average variable costs?

Answer 17

Total Variable = Average Variable x Output

Question 18

What is the formula for average variable costs?

Answer 18

Average Variable = Variable Costs / Output

Question 19

How is net profit calculated?

Answer 19

Net Profit = Operating Profit - Interest/Tax

Question 20

What is the formula for net profit margin?

Answer 20

NP Margin = (Net Profit / Sales Revenue) x 100

Question 21

What is the current ratio formula?

Answer 21

Current Ratio = Current Assets / Current Liabilities

Question 22

What does the acid test ratio measure?

Answer 22

Acid Test Ratio = (Current Assets - Stock) / Current Liabilities

Question 23

Capital Productivity

Answer 23

Capital Productivity = Output per Time Period / Number of Machines

Question 24

What is working capital and how is it calculated?

Answer 24

Working Capital = Current Assets - Current Liabilities

Question 25

Productivity

Answer 25

Productivity = Output per Time Period / Input per Time Period

Question 26

What is capacity utilization and how is it expressed?

Answer 26

Capacity Utilization = (Actual Output / Maximum Output) x 100

Question 27

How is labor productivity calculated?

Answer 27

Labor Productivity = Output per Time Period / Number of Workers/Hours Worked

Question 28

What is the formula for the Gearing Ratio?

Answer 28

Gearing Ratio = Non current liabilities/ Capital employed x 100

Question 29

What does ROCE stand for?

Answer 29

Return on Capital Employed

Question 30

What is the formula for ROCE?

Answer 30

ROCE Ratio = Operating Profit / Capital Employed x100

Question 31

How is Capital Employed calculated?

Answer 31

Capital Employed = Total Equity + Non-Current Liabilities

Question 32

What is the formula for Labour Productivity?

Answer 32

Labour Productivity = Output per Time Period / No. Workers/Hours Worked

Question 33

Labour Turnover

Answer 33

Labour Turnover = No. Employees Leaving / Average No. Employees x100

Question 34

How is Absenteeism calculated?

Answer 34

Absenteeism = No. Work Days Lost Through Absence / Total Possible Days Worked x100

Question 35

Closing balance

Answer 35

Net cash flow + Opening balance

Question 36

Net cash flow

Answer 36

Cash inflows - cash outflows

Question 37

Opening balance

Answer 37

Cash at the start of the month

Question 38

Budget variance

Answer 38

Budget amount - actual amount

Question 39

Average cost per unit (unit cost)

Answer 39

Total production cost / number of units

Question 40

Average rate of return

Answer 40

Average annual profit / initial investment x 100

Question 41

Capacity utilisation

Answer 41

actual output / minimum possible output x 100

Question 42

Working capital

Answer 42

Current assets - current liabilities

Question 43

Sales volume

Answer 43

Sales revenues / price

Question 44

Float time formula ( for critical path analysis)

Answer 44

LFT- Duration- EST