Formulas

Question 1

Total costs?

Answer 1

Total costs = total fixed costs + total variable costs

Question 2

Variable costs?

Answer 2

Variable costs = cost of one unit x quantity produced

Question 3

Revenue?

Answer 3

Revenue = price x quantity

Question 4

Break-even?

Answer 4

Break-even point in units = fixed costs / (sales price - variable cost)

Question 5

Whats another formula for Break-even?

Answer 5

Break-even point in costs / revenue = break-even point in units x sales price

Question 6

Margin of safety?

Answer 6

Margin of safety = actual or budgeted sales - break-even sales

Question 7

Interest (on loans)?

Answer 7

Interest (on loans) in % = total repayment - borrowed amount / borrowed amount x100

Question 8

Net cash flow?

Answer 8

Net cash flow = cash inflows (receipts) - cash outflows in a given period (payments)

Question 9

Opening balance?

Answer 9

Opening balance = closing balance of the previous period

Question 10

Closing balance?

Answer 10

Closing balance = opening balance + net cash flow

Question 11

Profit?

Answer 11

Profiit / loss = total revenue - total costs

Question 12

Gross profit?

Answer 12

Gross profit = sales revenue - cost of sales

Question 13

Gross profit margin?

Answer 13

Gross profit margin (%) = gross profit / sales revenue x100

Question 14

Net profit?

Answer 14

Net profit = Gross profit - other operating expenses and interest

Question 15

Net profit margin?

Answer 15

Net profit margin (%) = net profit / sales revenue x100

Question 16

Average rate of return?

Answer 16

Average rate of return (%) = average annual profit (total profit/ No. of years) /cost of investment x100

Question 17

Percentage growth?

Answer 17

Percentage growth = increase in size / original size x100