Formulas

Question 1

What is the formula for calculating total contribution ?

Answer 1

Total revenue - total variable costs

Question 2

How do you calculate the contribution per unit?

Answer 2

Selling price per unit - variable cost per unit

Question 3

Gearing ratio formula?

Answer 3

NLC/CE (sharholder funds+NCL)x100

Question 4

Acid test ratio formula

Answer 4

current assets - stock / current liabilities

Question 5

Current ratio formula

Answer 5

current assets/current liabilities

Question 6

ROCE (return on capital employed) formula

Answer 6

net profit / CE(shareholder funds + NCL) x100

Question 7

Depreciation formula

Answer 7

Historical cost - residual value/usefulness life of asset

Question 8

Working capital formula

Answer 8

current assets - current liabilities

Question 9

Capital employed formula

Answer 9

shareholders funds + non-current liabilities

Question 10

How to calculate ARR

Answer 10

1)Calculate total profit: total return - initial cost
2)Divide this by the number of years to get average annual profit
3)Divide this answer by he initial cost and times by 100