IGCSE Business Key Formulas

What is the formula for calculating revenue?

• Revenue = Number of Units Sold * Price per Unit

• Revenue = Number of Units Sold / Price per Unit

• Revenue = Number of Units Sold - Price per Unit

• Revenue = Number of Units Sold + Price per Unit

How do you calculate cost in a business?

• Subtract all revenue from expenses

• Divide total expenses by the number of employees

• Add up all expenses incurred in the production or operation of goods or services.

• Ignore all expenses and focus only on revenue

What is the formula for determining profit?

• Profit = Revenue / Cost

• Profit = Revenue x Cost

• Profit = Revenue + Cost

• Profit = Revenue - Cost

Explain the break-even formula in business.

• Break-even point = Total Variable Costs / (Selling Price per Unit - Fixed Cost per Unit)

• Break-even point = Total Fixed Costs x (Selling Price per Unit - Variable Cost per Unit)

• Break-even point = Total Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

• Break-even point = Total Fixed Costs / (Selling Price per Unit + Variable Cost per Unit)

How do you calculate market share?

• Market share = (Company's number of employees / Total market number of employees) * 100

• Market share = (Company's sales revenue / Total market sales revenue) * 100

• Market share = (Company's profit / Total market profit) * 100

• Market share = (Company's market value / Total market value) * 100

What is the formula for gross profit margin?

• (Revenue + Cost of Goods Sold) / Revenue * 100%

• (Revenue - Cost of Goods Sold) / Revenue * 100%

• (Revenue - Cost of Goods Sold) / Cost of Goods Sold * 100%

• Revenue / Cost of Goods Sold * 100%

Explain the net profit margin formula.

• Net Profit Margin = (Net Profit / Total Expenses) * 100

• Net Profit Margin = (Net Profit / Operating Income) * 100

• Net Profit Margin = (Net Profit / Gross Profit) * 100

• Net Profit Margin = (Net Profit / Total Revenue) * 100

How is return on capital employed calculated?

• ROCE = (EBIT / Total Assets) * 100

• ROCE = (Net profit / Capital Employed) * 100

• ROCE = (Net Income / Capital Employed) * 100

• ROCE = (Revenue / Capital Employed) * 100

What is the formula for current test ratio?

• Current Assets + Current Liabilities

• Current Assets - Current Liabilities

• Current Assets / Current Liabilities

• Current Assets x Current Liabilities

Explain the acid test ratio formula.

• Current Assets / Current Liabilities

• (Current Assets + Inventory) / Current Liabilities

• (Current Assets - Inventory) / Current Liabilities

• Current Assets / (Inventory + Current Liabilities)