Formulas

Question 1

Margin of safety

Answer 1

Actual/ budgeted– BE point

Question 2

Breakeven point

Answer 2

Fixed costs// selling price-variable costs

Question 3

Net cash flows

Answer 3

Inflows- outflows

Question 4

Revenue

Answer 4

selling price x units sold

Question 5

Total costs

Answer 5

Fixed costs + variable costs

Question 6

Profit or loss

Answer 6

Revenue - total costs

Question 7

Gross profit

Answer 7

Revenue - cost of sales

Question 8

Net profit

Answer 8

Gross profit - expenses

Question 9

Gross profit margin

Answer 9

Gross profit/ sales revenue x 100

Question 10

Net profit margin

Answer 10

Net profit/ sales revenue x 100

Question 11

Average rate of return

Answer 11

average annual profit (total profit/ number of years) // cost of investment x 100