Appendix 4: Formulae

The list below gives formulae for use in this qualification. Formulae will be provided in the
examinations for Paper 1 and Paper 2.

Gross profit margin

Gross profit = revenue cost of sales

gross profit
Gross profit margin = × 100
revenue

Operating profit margin

Operating profit = gross profit other operating expenses
operating profit
Operating profit margin = × 100
revenue

Markup
profit per item
Markup = × 100
cost per item

Return on capital employed (ROCE)

operating profit
ROCE = × 100
capital employed

Current ratio
current assets
Current ratio =
current liabilities

Acid test ratio

Acid test ratio =

current liabilities

Pearson Edexcel International GCSE in Business – Specification 35

Issue 1 – November 2016 © Pearson Education Limited 2016