formulas

Question 1

Revenue

Answer 1

= selling price per unit x number of units sold

Question 2

variable costs

Answer 2

= variable cost per unit x number of units sold

Question 3

total cost

Answer 3

= fixed cost + Variable cost

Question 4

Profit

Answer 4

= Total revenue - total cost

Question 5

market capatalistaion

Answer 5

= Number of issued shares x Current shares price

Question 6

net gain

Answer 6

= Expected value - initial cost of decision

Question 7

market growth

Answer 7

= Change in the size of the market over a period/ original size of the market x 100

Question 8

market share

Answer 8

= sales of one product/ total sales in the market x 100

Question 9

added value

Answer 9

= sales revenue - costs of bought- in goods and services

Question 10

labour productivity

Answer 10

= output over a time period/ number of employees

Question 11

unit costs

Answer 11

= total costs/ number of units of output

Question 12

capacity utilisation

Answer 12

= actual output / maximum possible output x 100

Question 13

return on investment

Answer 13

= profit from the investment/ cost of the investment x 100

Question 14

gross profit

Answer 14

= revenue - cost of sales

Question 15

Operating profit

Answer 15

= Gross profit - operating expenses

Question 16

profit for the year

Answer 16

= operating profit - taxes

Question 17

Gross profit margin (%)

Answer 17

= Gross profit/ revenue x 100

Question 18

Operating profit margin (%)

Answer 18

= operating profit/ revenue x 100

Question 19

Profit for the year margin (%)

Answer 19

= profit for year/ revenue x 100

Question 20

contribution per unit

Answer 20

= selling price- variable cost per unit

Question 21

total contribution

Answer 21

= contribution per unit x Unit sold
or
= Total revenue - Total variable cost

Question 22

break even

Answer 22

= Fixed costs/ Contribution per unit

Question 23

margin of safety

Answer 23

= Actual level of output - Break even level of output

Question 24

Labour turnover

Answer 24

= Number of staff leaving / Number of staff employed by the the Business x 100

Question 25

employee costs as percentage of turnover

Answer 25

= employee costs/ Units of output

Question 26

Labour cost per unit

Answer 26

= labour costs/ units of output

Question 27

return on capital employees (ROCE)

Answer 27

= operating profit/ total equity + non- current liabilities x 100

Question 28

current ratios

Answer 28

= Current assests/ current liabilities

Question 29

gearing

Answer 29

Non- current liabilities/ total equity + non- current liabilities x 100
where total equity + non current liabilities- capital employed

Question 30

payable days

Answer 30

= payables/ costs of sales x 365

Question 31

receivable days

Answer 31

= Receivables/ revenue x 365

Question 32

Inventory turnover

Answer 32

= costs of sales/average inventories held

Question 33

average rate of return (%)

Answer 33

= average annual return (£) / Initial cost of project (£) x 100