Formulas

Question 1

Revenue

Answer 1

selling price per unit X number of units sold

Question 2

variable costs

Answer 2

cost per unit X number of units sold

Question 3

total costs

Answer 3

fixed costs + variable costs

Question 4

profit

Answer 4

total revenue - total costs OR
total contribution - fixed costs

Question 5

market capitalisation

Answer 5

share price X number of shares

Question 6

expected value

Answer 6

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

Question 7

net gain

Answer 7

expected value - initial cost of decision

Question 8

market growth (%)

Answer 8

(change in size of market/original size of market) x100

Question 9

market share (%)

Answer 9

(sales of one product OR brand Or business/total sales in the market) x100

Question 10

added value

Answer 10

sales revenue - costs of bought in goods/services

Question 11

labour productivity

Answer 11

output over a time period/number of employees

Question 12

unit costs

Answer 12

total costs/number of units of output

Question 13

capacity utilisation (%)

Answer 13

(actual output/maximum possible output) x100

Question 14

return on investment (%)

Answer 14

(profit from investment (£) /cost of investment (£)) x 100

Question 15

gross profit

Answer 15

revenue - variable costs

Question 16

operating profit

Answer 16

gross profit - operating expenses

Question 17

profit of the year

Answer 17

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

Question 18

gross profit margin (%)

Answer 18

(gross profit / revenue) x 100

Question 19

operating profit margin (%)

Answer 19

(operating profit / revenue) x 100

Question 20

profit of the year margin (%)

Answer 20

(profit of the year / revenue) x 100

Question 21

variance

Answer 21

budgeted figure - actual figure

Question 22

contribution per unit

Answer 22

selling price per unit - variable cost per unit

Question 23

total contribution

Answer 23

contribution per unit x units sold
OR
total revenue - total variable costs

Question 24

break even output

Answer 24

fixed costs / contribution per unit
OR
fixed costs / selling price per unit - variable costs per unit

Question 25

margin of safety

Answer 25

actual level of output - break even level of output

Question 26

labour turnover (%)

Answer 26

(number of staff leaving / number of staff employed) x 100

Question 27

employee retention (%) in a time period

Answer 27

(number of employees who remained in the period / number of employees at the start of the period) x 100

Question 28

employee costs as a % of turnover

Answer 28

(employee cost / turnover) x 100

Question 29

labour cost per unit

Answer 29

labour costs / units of output

Question 30

return on capital employed (ROCE) (%)

Answer 30

(net profit (£) / capital employed (£)) x 100

Question 31

current ratio

Answer 31

current assets / current liabilities

Question 32

gearing (%)

Answer 32

(non current liabilities / total equity + non-current liabilities) x 100 OR non-current liabilities / capital employed

Question 33

payables days

Answer 33

(payables / cost of sales) x 365

Question 34

recievables days

Answer 34

(recievables / revenue) x 365

Question 35

inventory turnover

Answer 35

cost of sales / average inventories held

Question 36

average rate of return (%)

Answer 36

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