Business Calculations: Master Financial Mathematics for Business Success

Question 1

A company has a cash inflow of £10,000 and a cash outflow of £5,000 in a month. What is the net cash flow?

Accepted Answer

£5,000

Answer

£10,000

Answer

£15,000

Answer

£20,000

Question 2

A company has a net profit of £5,000 and a return on investment (ROI) of 10%. What is the amount of investment?

Accepted Answer

£25,000

Answer

£35,000

Answer

£45,000

Answer

£55,000

Question 3

A company has a current assets to current liabilities ratio of 2. If current liabilities increase by £10,000, what is the new current assets to current liabilities ratio?

Accepted Answer

1.9

Answer

1.8

Answer

2.0

Answer

2.1

Question 4

A company's gross profit margin is currently 30%. If the cost of goods sold increases by 10%, what will be the new gross profit margin, assuming that revenue remains unchanged?

Accepted Answer

27%

Answer

33%

Answer

30%

Answer

20%

Question 5

A company's current ratio is 1.5. What does this indicate about the company's financial health?

Accepted Answer

The company has more assets than liabilities.

Answer

The company has more liabilities than assets.

Answer

The company has the same amount of assets and liabilities.

Answer

The company is facing financial difficulties.

Question 6

A company has a break-even point of 100 units. What does this mean?

Accepted Answer

The company will neither make a profit nor a loss if it sells 100 units.

Answer

The company will make a profit if it sells more than 100 units.

Answer

The company will make a loss if it sells less than 100 units.

Answer

The company will make a maximum profit if it sells 100 units.

Question 7

Which of the following is NOT a component of cash flow?

Accepted Answer

Profit and loss

Answer

Operating activities

Answer

Investing activities

Answer

Financing activities

Question 8

A company has a net income of £50,000 and a total cost of £75,000. Calculate the company's profit margin.

Accepted Answer

33.33%

Answer

66.67%

Answer

25%

Answer

50%

Question 9

A company's return on investment (ROI) is 10%. What does this imply?

Accepted Answer

The company is earning 10% profit on its investments.

Answer

The company is losing 10% on its investments.

Answer

The company is breaking even on its investments.

Answer

The company is not making any money on its investments.

Question 10

A company has a current ratio of 1.5. If its current assets are £100,000, what are its current liabilities?

Accepted Answer

£66,666.67

Answer

£50,000

Answer

£75,000

Answer

£100,000

Question 11

A business has a profit margin of 10%. If its sales are £100,000, calculate its net profit.

Accepted Answer

£10,000

Answer

£5,000

Answer

£15,000

Answer

£20,000

Question 12

A business has a debt-to-equity ratio of 0.5. If its equity is £50,000, calculate its debt.

Accepted Answer

£25,000

Answer

£10,000

Answer

£50,000

Answer

£75,000

Question 13

A company has a net profit of £20,000 and a return on equity of 15%. What is the company's equity?

Accepted Answer

£133,333.33

Answer

£10,000

Answer

£150,000

Answer

£25,000

Question 14

A company's break-even point is currently 10,000 units. If fixed costs increase by £10,000, what will be the new break-even point, assuming variable costs and selling price remain unchanged?

Accepted Answer

11,000 units

Answer

9,000 units

Answer

12,000 units

Answer

13,000 units

Question 15

A company's current assets are £200,000 and its current liabilities are £100,000. Calculate the company's current ratio.

Accepted Answer

2

Answer

1

Answer

4

Answer

3

Question 16

A business has a gross profit margin of 30%. Calculate the percentage of its sales revenue that is its gross profit.

Accepted Answer

30%

Answer

40%

Answer

20%

Question 17

A business has a net profit margin of 10%. Calculate the percentage of its total revenue that is its net profit.

Accepted Answer

10%

Answer

20%

Answer

15%

Answer

5%

Question 18

A company's gross profit ratio is 40%. If the company's total cost of sales is £250,000, what is its revenue?

Accepted Answer

£416,666.67

Answer

£200,000.00

Answer

£350,000.00

Answer

£500,000.00

Question 19

A company's debt-to-equity ratio is 1.2. If the company's equity is £50,000, what is its debt?

Accepted Answer

£60,000

Answer

£40,000

Answer

£70,000

Question 20

A company's inventory turnover ratio is 1.5. If the company's sales are £150,000 and the average inventory is £50,000, what is the company's cost of goods sold?

Accepted Answer

£100,000

Answer

£75,000

Answer

£125,000

Answer

£150,000

Question 21

A business sells a product at a selling price of £20,000. The cost of goods sold is £12,000. Calculate the gross profit earned by the business.

Accepted Answer

£8,000

Answer

£32,000

Answer

£20,000

Answer

£12,000

Question 22

Which of the following is not a potential benefit of using MCQs in assessments?

Accepted Answer

Provides personalized, detailed feedback

Answer

Relatively reliable

Answer

Efficient

Answer

Objective

Question 23

What is a key distinction between formative and summative assessments?

Accepted Answer

Formative assessments are used to provide feedback and facilitate improvement, while summative assessments are primarily used for grading and evaluating student performance.

Answer

Formative assessments are typically more challenging, while summative assessments are easier.

Question 24

What is a primary purpose of developing a rigorous assessment schedule?

Accepted Answer

To ensure fairness, reliability, and validity in the assessment process.

Answer

To make it easier for students to prepare for assessments

Answer

To reduce the burden on teachers

Question 25

Which of the following is considered a best practice when providing effective feedback to students?

Accepted Answer

Providing specific, timely, and actionable feedback

Answer

Providing feedback only when students perform exceptionally well

Answer

Using general, vague language in feedback

Answer

Focusing solely on negative aspects of student work

Question 26

A company offers a 10% discount on all purchases over £50. If a customer purchases goods worth £75, how much discount will they receive?

Accepted Answer

£7.50

Answer

£5.00

Answer

£12.50

Answer

£10.00

Question 27

A company has a monthly cash inflow of £10,000 and a monthly cash outflow of £8,000. What is the net cash flow for the company each month?

Accepted Answer

£2,000

Answer

£0

Answer

£-2,000

Answer

£18,000

Question 28

Which of the following is a key indicator of a business's financial health?

Accepted Answer

Return on investment (ROI)

Answer

Number of employees

Answer

Brand recognition

Answer

Customer satisfaction

Question 29

A company forecasts cash inflows of £100,000 and cash outflows of £80,000 in the next month. What is its projected cash flow for that month?

Accepted Answer

£20,000 surplus

Answer

£100,000 surplus

Answer

£20,000 deficit

Answer

£80,000 deficit

Question 30

A business has a profit margin of 10% and a sales revenue of £500,000. What is its net profit?

Accepted Answer

£50,000

Answer

£250,000

Answer

£100,000

Answer

£450,000

Question 31

A company has a return on investment of 15%. If its net income is £100,000, calculate its investment.

Accepted Answer

£666,666.67

Answer

£150,000

Answer

£250,000

Question 32

A business has a working capital of £50,000. If its current assets are £100,000, what are its current liabilities?

Accepted Answer

£50,000

Answer

£25,000

Answer

£100,000

Answer

£75,000

Question 33

A company expects to receive £5,000 in sales next month. It has estimated expenses of £2,000 and a loan repayment of £1,000. What is the projected cash flow for next month?

Accepted Answer

£2,000

Answer

£8,000

Answer

£6,000

Answer

£3,000

Question 34

A company's break-even point is 1,000 units. If it sells 1,500 units, it will:

Accepted Answer

Make a profit.

Answer

Break even.

Answer

Incur a loss.

Question 35

A company has a positive cash flow from operations. This means that:

Accepted Answer

The company is generating more cash from its core business activities than it is using.

Answer

The company has a high level of debt.

Answer

The company is investing heavily in new assets.

Answer

The company is paying out large dividends to shareholders.

Question 36

A company sells a product for £100. The cost of producing the product is £60. What is the gross profit margin?

Accepted Answer

(£100 - £60) / £100 = 40%

Answer

£100 / £60 = 166.67%

Answer

£60 / £100 = 60%

Answer

(£100 - £60) / £60 = 25%

Question 37

A shop purchases a product for £50 and sells it for £75. What is the markup percentage?

Accepted Answer

((£75 - £50) / £50) * 100 = 50%

Answer

((£50 - £75) / £50) * 100 = -50%

Answer

((£75 - £50) / £50) * 200 = 100%

Answer

£50 / £75 * 100 = 66.67%

Question 38

A company has a current ratio of 2:1. This means:

Accepted Answer

The company has current assets of £2 for every £1 of current liabilities.

Answer

The company has a high return on assets.

Answer

The company has current assets of £1 for every £2 of current liabilities.

Answer

The company has more current liabilities than current assets.

Question 39

A business incurs fixed costs of £50,000 and variable costs of £10 per unit. If they sell 10,000 units, what is their break-even point in units?

Accepted Answer

(£50,000 / (£10 per unit)) = 5,000 units

Answer

£10 per unit * 5,000 units = £50,000

Answer

(£50,000 / £10 per unit) / 10,000 = 5 units

Answer

(£50,000 * £10 per unit) = 500,000 units

Question 40

A company has a net income of £100,000 and total assets of £500,000. Calculate their return on assets (ROA).

Accepted Answer

(£100,000 / £500,000) * 100 = 20%

Answer

(£100,000 - £500,000) * 100 = -£400,000

Answer

(£500,000 / £100,000) * 100 = 500%

Answer

£100,000 * £500,000 = £50,000,000

Question 41

A company has sales of £1,000,000 and cost of goods sold of £600,000. What is their gross profit?

Accepted Answer

£1,000,000 - £600,000 = £400,000

Answer

£600,000 / £1,000,000 = 60%

Answer

£1,000,000 + £600,000 = £1,600,000

Answer

£1,000,000 * £600,000 = £600,000,000

Question 42

A company has a debt-to-equity ratio of 0.5. This means:

Accepted Answer

The company has £0.50 of debt for every £1 of equity.

Answer

The company has a high profit margin.

Answer

The company has more debt than equity.

Answer

The company has £1 of debt for every £0.50 of equity.

Question 43

A retailer buys a product for £100 and sells it for £150. What is the percentage markup?

Accepted Answer

50%

Answer

150%

Answer

25%

Answer

33.33%

Question 44

A company offers a 10% discount on a product that originally costs £200. What is the discounted price?

Accepted Answer

£180

Answer

£190

Answer

£100

Answer

£210

Question 45

A business has a current ratio of 2:1. What does this indicate about the company's financial health?

Accepted Answer

The company has twice as many current assets as current liabilities.

Answer

The company has a high level of debt.

Answer

The company has twice as many current liabilities as current assets.

Question 46

A company sells 100 units of a product at £10 per unit. The total variable cost is £500. What is the company's contribution margin?

Accepted Answer

£500

Answer

£1,000

Answer

£100

Answer

£1,500

Question 47

A business has fixed costs of £1,000 and a contribution margin of £5 per unit. What is the break-even point in units?

Accepted Answer

200 units

Answer

100 units

Answer

500 units

Answer

1,000 units

Question 48

A company's cash flow statement shows a net cash inflow of £50,000 from operating activities. What does this indicate?

Accepted Answer

The company generated more cash from its core business operations than it used.

Answer

The company is highly profitable.

Answer

The company's profits are increasing.

Question 49

A business has a net income of £100,000 and a total asset turnover of 2. What is the company's return on assets (ROA)?

Accepted Answer

20%

Answer

50%

Answer

100%

Answer

10%

Question 50

A company has a gross profit margin of 40%. What does this indicate?

Accepted Answer

The company keeps 40% of every sales pound to cover operating expenses and profit.

Answer

The company has a high level of debt.

Answer

The company is highly profitable.

Question 51

A business has a debt-to-equity ratio of 0.5. What does this indicate?

Accepted Answer

The company has 50% of its financing from debt and 50% from equity.

Answer

The company has a high level of profitability.

Answer

The company is highly leveraged.

Question 52

A company's profit and loss statement shows a net profit of £20,000. What does this indicate?

Accepted Answer

The company's revenue exceeded its expenses by £20,000.

Answer

The company's cash flow is positive.

Answer

The company is highly profitable.