Formulas

Question 1

What is the formula for revenue?

Answer 1

selling price per unit x number of units sold

Question 2

What is the formula for variable costs?

Answer 2

variable cost per unit x number of units sold

Question 3

What is the formula for total costs?

Answer 3

fixed costs + variable costs

Question 4

What is the formula for profit?

Answer 4

total revenue - total costs or total contribution - fixed costs

Question 5

What is the formula for market capitalisation?

Answer 5

number os issues shared x current share price

Question 6

What is the formula for expected value of a decision with two possible outcomes?

Answer 6

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

Question 7

What is the formula for net gain?

Answer 7

expected value - initial costs of decision

Question 8

What is the formula for market growth?

Answer 8

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

Question 9

What is the formula for market share (%)

Answer 9

sales of one products or brand or business/total sales in the market x 100

Question 10

What is the formula for added value?

Answer 10

sales revenue - costs of bought in goods and services

Question 11

What is the formula for labour productivity?

Answer 11

output over a period of time/number of employees

Question 12

What is the formula for expected for unit costs?

Answer 12

total costs/number of units of output

Question 13

What is the formula for capacity utilisation (%)?

Answer 13

actual output/maximum possible output x 100

Question 14

What is the formula for return on investment(%)?

Answer 14

profit from the investment/cost of the investment x 100

Question 15

What is the formula for gross profit?

Answer 15

revenue - cost of sales

Question 16

What is the formula for profit from operation?

Answer 16

gross profit - operating expenses

Question 17

What is the formula for profit for the year?

Answer 17

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

Question 18

What is the formula for gross profit margin (%)

Answer 18

gross profit/revenue x 100

Question 19

What is the formula for profit from operations margin?

Answer 19

operating profit/revenue x 100

Question 20

What is the formula for profit of year margin (%)

Answer 20

profit for year/revenue x 100

Question 21

What is the formula for variance?

Answer 21

budgeted figure - actual figure

Question 22

What is the formula for contribution per unit?

Answer 22

selling price - variable costs per unit

Question 23

What is the formula for total contribution?

Answer 23

contribution per unit x units sold

Question 24

What is the formula for break even output?

Answer 24

fixed costs/contribution per unit

Question 25

What is the formula for margin of safety?

Answer 25

actual levels of output - break even level of output

Question 26

What is the formula for labour turnover(%)

Answer 26

number of staff leaving/number of staff employed by the business x 100

Question 27

What is the formula for employee costs as a percentage of turnover?

Answer 27

employee costs/turnover x 100

Question 28

What is the formula for labour costs per unit?

Answer 28

labour costs/units of output

Question 29

What is the formula for return on capital employed(%)

Answer 29

operating profit/total equity + non current liabilities

Question 30

What is the formula for current ratio?

Answer 30

current assets/current liabilities

Question 31

What is the formula for gearing(%)

Answer 31

non current liabilities/total equity + non current liabilities x 100

Question 32

What is the formula for payables days?

Answer 32

payables/cost of sales x 365

Question 33

What is the formula for expected receivables days?

Answer 33

receivables/revenue x 365

Question 34

What is the formula for inventory turnover?

Answer 34

costs of sales/average inventories held

Question 35

What is the formula for average rate of return (%)

Answer 35

average annual return/initial costs of project x 100