Unit F Formulas + Equations

Question 1

Sales revenue

Answer 1

Selling price per unit x Quantity sold

Question 2

Cost of goods sold

Answer 2

Opening inventory + Purchases - Closing inventory

Question 3

Gross profit

Answer 3

Sales revenue - Cost of goods sold

Question 4

Profit/loss for the year

Answer 4

Gross profit - Expenses + Other income

Question 5

Net current assets

Answer 5

Current assets - Current liabilities

Question 6

Net assets

Answer 6

Non current assets + Net current assets - Non current liabilities

Question 7

Capital employed

Answer 7

Opening capital = Profit for year - Drawings

Question 8

Net book value

Answer 8

Cost - Depreciation

Question 9

Straight line depreciation

Answer 9

Historic cost - Residual value / Expected life

Question 10

Reducing balance depreciation

Answer 10

Net book value x % Set depreciation

Question 11

Gross profit margin

Answer 11

Gross profit / Sales revenue x100

Question 12

Mark-up

Answer 12

Gross profit / Cost of goods sold x100

Question 13

Profit margin

Answer 13

Profit / Revenue x100

Question 14

Return on capital employed

Answer 14

Profit / Capital employed x100

Question 15

Current ratio

Answer 15

Current assets / Current liabilities

Question 16

Liquid capital ratio

Answer 16

Current assets - Inventory / Current liabilities

Question 17

Trade receivable days

Answer 17

Trade receivables / Credit sales x365

Question 18

Trade payable days

Answer 18

Trade payables / Credit purchases x365

Question 19

Inventory turnover

Answer 19

Average inventory / Cost of sales x365