Equations/Calculations

• What is the formula for labour productivity?

  total output/no. of employees
• What is the formula for Unit cost?

  cost/unit of output
• What is the formula for capital utilisation?

  actual output/maximum possible output x 100
• What is the formula for Re-order level?

  (lead time x average daily use) + buffer stock
• What is the formula for Gross Profit?

  Sales Revenue - Cost of sales
• What is the formula for operating profit?

  Gross profit - expenses
• What is the formula for profit for the year?

  Operating profit - other costs - tax
• What is the formula for revenue

  Quantity sold x price
• What is the formula for Profit?

  revenue - cost
• What is another formula for profit?

  Total contribution - Fixed cost
• What is the formula for Contribution per unit?

  Selling price - variable cost
• What is the formula for total Contribution?

  Total sales revenue - Total Variable cost
• What is another formula for total contribution?

  Contribution per unit x output
• What is the formula for Break even ?

  fixed cost/contribution per unit
• What is the formula for margin of safety?

  Actual Output - breakeven output
• What is the formula for Labour turnover

  Number of employees leaving/ average number of employees x 100
• What is the formula for Labour retention?

  number of retained employees/ average number of employees x 100
• What is the formula for Employee costs as % of turnover?

  Employee cost/ staff turnover x 100
• What is the formula for labour cost per unit?

  labour cost / output
• What is the formula for Gross profit margin?

  Gross profit/ revenue x 100
• What is the formula for Operating profit margin?

  operating profit/ revenue x 100
• What is the formula for Current ratio?

  Current asset/current liability
• What is the formula for Acid test?

  Current asset - inventory/ current liability
• What is the formula for ROCE?

  Operating profit/ capital employed x 100
• What is the formula for Inventory turnover? 


  Cost of sales/ average inventory
• What is the formula for payable’s ?


  Payables/ Cost of sales x 365
• What is the formula for receivables?


  Receivables/ revenue x 365
• What is the formula for gearing?

  Non current liability / capital employed x 100
• how to work out capital employed?

  Total equity + Non current liability
• What is the formula for Working capital ?

  Current asset - current liability
• What is the formula for Float time?

  latest finish time - duration - easiest start time
• What is the formula for Average cost?

  Total cost of production/ level of production
• What is the formula for Added value?

  Sales revenue - cost of brought in goods + services
• What is the formula for Average Rate of Return?

  • Income - cost

  • Profit/ lifespan

  • Average annual profit/initial cost of investment x 100
• How to calculate Net Present Value?

  • Multiple each year by discount factor

  • Add up all Net present value

  • NPV - Cost of investment
• How to calculate payback period?

  • Calculate net cash flow

  • Add together the net cash flow to get a figure before the initial investment (years)

  • The added figure minus initial investment to get y

  • y/next year x 12 (months)
• What’s the formula for percentage change

  (new - old)/old x 100
• What is the formula for Return on investment?

  profit from investment/ cost of investment x 100
• turnover


  output x selling price