formulas

Question 1

total costs

Answer 1

fixed costs + variable costs

Question 2

profit

Answer 2

total revenue - total costs

Question 3

variable costs

Answer 3

variable costs per unit x no. units sold

Question 4

total revenue

Answer 4

selling price per unit x no. unit sold

Question 5

market capitalisation

Answer 5

no. shares issued x share price

Question 6

expected value

Answer 6

(pay off A x probability A) + (pay off B x probability B)

Question 7

net gain decision tree

Answer 7

expected value - initial costs of decision

Question 8

market growth

Answer 8

change in market size between years
————————————————–X100
size of market in previous year

Question 9

sales growth

Answer 9

change in sales between years
——————————————– X100
sales of product in previous year

Question 10

market share

Answer 10

sales of one product
————————————– X100
Toal sales in market

Question 11

price elasticity of demand

Answer 11

change in demand
—————————————- X100
change in price

Question 12

added value

Answer 12

sales revenue - costs of goods

Question 13

labour productivity

Answer 13

 no. employees

Question 14

unit costs

Answer 14

no. unit of output produced

Question 15

capacity utilisation

Answer 15

actual output in a given time period
————————————————-X100
maximum output in given time period

Question 16

ROI

Answer 16

return of investment £
——————————— X100
cost of investment £

Question 17

gross profit

Answer 17

sales revenue - cost of sales

Question 18

operating profit

Answer 18

sales revenue - cost of sales - operating expenses

Question 19

profit for the year

Answer 19

operating profit + profit from other activities - net finance costs - tax

Question 20

contribution per unit

Answer 20

selling price - variable costs per unit

Question 21

total contribution

Answer 21

total revenue - total variable costs

Question 22

break even output

Answer 22

contribution per unit

Question 23

margin of safety

Answer 23

actual output - break even output

Question 24

gross profit margin

Answer 24

gross profit
——————— X100
sales revenue

Question 25

operating profit margin

Answer 25

operating profit ------------------------ X100 sales revenue

Question 26

profit for the year margin

Answer 26

profit for the year --------------------------- X100 sales revenue

Question 27

labour turnover

Answer 27

no. staff leaving during year --------------------------------------------------X100 average no. staff employed during year

Question 28

employee retention rate

Answer 28

no. employees at end period-no. of leavers ------------------------------------------------- X100 no. employees at end period

Question 29

employee costs as percentage of turnover

Answer 29

employee costs ------------------------ X100 slaes turnover

Question 30

labour cost per unit

Answer 30

labour costs --------------------- units of output

Question 31

return on capital employed

Answer 31

operating profit --------------------------------------------------X100 total equity + non-current liabilities

Question 32

current ratio

Answer 32

current assets ----------------------- current liabilities

Question 33

gearing

Answer 33

non-current liabilities ------------------------------------------------ X100 total equity + non current liabilities

Question 34

payable days

Answer 34

payables ------------------- X365 cost of sales

Question 35

receivables days

Answer 35

receivables --------------------- X365 sales revenue

Question 36

inventory turnover

Answer 36

cost of goods sold ----------------------------------- average inventories held

Question 37

average rate of return

Answer 37

net return from project £ -----------------------------------------X100 initial cost of project