Unit 3 Personal & Business Finance - Formulas Revision

How do you calculate Net Cash Flow?

• Net Cash Flow = Total Cash Inflow + Total Cash Outflow

• Net Cash Flow = Total Cash Inflow - Total Cash Outflow

• Net Cash Flow = Total Cash Inflow * Total Cash Outflow

• Net Cash Flow = Total Cash Inflow / Total Cash Outflow

How is Inventory Turnover calculated?

• Inventory Turnover = (Average Inventory / Cost of Sales) x 365

• Inventory Turnover = (Cost of Sales / Average Inventory) x 365

• Inventory Turnover = (Total Sales / Average Inventory) x 365

• Inventory Turnover = (Average Inventory / Total Sales) x 365

How is Gross Profit Margin calculated?

• Gross Profit Margin = (Gross Profit / Revenue) x 100

• Gross Profit Margin = (Net Profit / Revenue) x 100

• Gross Profit Margin = (Operating Income / Revenue) x 100

• Gross Profit Margin = (Total Assets / Total Liabilities) x 100

What is the formula for Profit?

• Profit = Total Revenue + Total Cost

• Profit = Total Revenue - Total Cost

• Profit = Total Revenue * Total Cost

• Profit = Total Revenue / Total Cost

What is the Margin of Safety?

• Margin of Safety = Actual Sales + Break-Even Sales

• Margin of Safety = Actual Sales - Break-Even Sales

• Margin of Safety = Break-Even Sales - Actual Sales

• Margin of Safety = Actual Sales / Break-Even Sales

What is the formula for Average Inventory?

• Average Inventory = (Opening Inventory + Closing Inventory) / 2

• Average Inventory = Opening Inventory - Closing Inventory

• Average Inventory = (Opening Inventory + Closing Inventory) * 2

• Average Inventory = Closing Inventory - Opening Inventory

What is the formula for Closing Balance?

• Closing Balance = Opening Balance + Net Cash Flow

• Closing Balance = Opening Balance - Net Cash Flow

• Closing Balance = Net Cash Flow - Opening Balance

• Closing Balance = Opening Balance * Net Cash Flow

How do you calculate Profit Margin?

• Profit Margin = (Profit / Revenue) x 100

• Profit Margin = (Revenue - Cost) / Revenue

• Profit Margin = (Total Assets - Total Liabilities) / Total Assets

• Profit Margin = (Net Income / Total Equity) x 100

How is the Current Ratio determined?

• Current Ratio = Current Assets + Current Liabilities

• Current Ratio = Current Assets - Current Liabilities

• Current Ratio = Current Assets / Current Liabilities

• Current Ratio = Current Liabilities / Current Assets

What is the formula for Trade Payable Days?

• Trade Payable Days = (Trade Payables / Credit Purchases) x 365

• Trade Payable Days = (Credit Purchases / Trade Payables) x 365

• Trade Payable Days = (Trade Payables + Credit Purchases) / 365

• Trade Payable Days = (Trade Payables - Credit Purchases) x 365