Business Ratios

Definition: Contribution per unit x number of units sold

• Variable cost per unit

• Gross profit

• Total contribution

• Total costs

Definition: CAN BE WRITTEN LIKE: Total equity + non current liabilities, Debt + equity, Non-current liabilities + share capital + reserves

• Operating profit

• Capital employed

• Net assets

• Capacity utilisation

Definition: Operating profit / capital employed x 100

• Return on investment (ROI)

• Return on equity (ROE)

• Return on capital employed (ROCE)

• Operating profit margin

What is the correct term for the business ratio defined as "Gross profit / sales revenue x 100"?

• Gross Profit

• Net Cash Flow

• Current Ratio

• Gross Profit Margin

What is the correct term for the business ratio defined as "total variable cost / number of units"?

• Variable cost per unit

• Contribution per unit

• Fixed cost per unit

• Total contribution

What is the correct term for the business ratio defined as "Current output / maximum possible output x 100"?

• Profit maximisation

• Diversification

• Total contribution

• Capacity utilisation

What is the correct term for the business ratio defined as "Profit for the year / sales revenue x 100"?

• Profit for the year Margin

• Profit (using contribution)

• Profit for the year

• Total contribution

Which term is defined as "40-50%"?

• Gearing accountants ideal

• Capacity utilisation

• Gearing ratio

• Current Ratio accountants ideal

Which term is defined by the formula "Total inflows - total outflows"?

• Net current assets

• Net farm income

• Net cash flow

• Gross profit

Which term is defined by the formula "Gross Profit - Expenses"?

• Net Assets

• Operating Profit

• Total Contribution

• Customer Equity