Everything you need to know about how Paper 1 is marked and how to write answers that reach the top level. Use it alongside the lesson slides, before practice papers, and when you revise.
| Length | 2 hours |
|---|---|
| Marks | 90 (one third of the A-level) |
| Structure | Two sections. Each section is a case study followed by five questions worth 45 marks. |
| Every section | 6 · 6 · 9 · 9 · 15. These are the only question tariffs on the paper. |
| Calculations | Two quantitative questions on the paper, each set as a 9 or a 15-marker. There are no stand-alone calculation questions. |
| Content | Unit 3.1 only. Paper 1 is standalone. |
The three question types build on each other. Master the 6-mark chain first, because the 9 and 15 are made of chains.
One developed chain of reasoning that reaches the end point of the question. No judgement.
A chain for and a chain against one action, then a supported judgement on that action.
Two options, each analysed both ways, then a recommendation built on the business's priorities.
AO1 knowledge and understanding · AO2 application to the case · AO3 analysis (chains of reasoning) · AO4 evaluation (judgement)
Answers are marked by levels, read as a whole. The mark scheme also tells examiners the maximum mark when a skill is missing. These caps tell you what you cannot leave out.
| If your answer… | 6 | 9 | 15 |
|---|---|---|---|
| has no chain of analysis | 3 | – | – |
| only shows knowledge and understanding | 2 | 2 | 3 |
| has knowledge and analysis, but no use of the case (and, for 9 and 15, no judgement) | 4 | 4 | 7 |
| has no evaluation | – | 6 | 10 |
| Quantitative: only does the calculation, correctly | – | 4 | 4 |
| Quantitative: bases the answer on the calculation in isolation | – | 6 | – |
| Quantitative: does not use the calculation in the argument | – | – | 9 |
Every mark on Paper 1 comes from four skills. The question types in the rest of this guide are just different ways of combining them. Get these right and every question gets easier.
Knowledge marks come from using business terms accurately, not from writing definitions for their own sake. Use the term, then use it to do something.
Application means using the case to show why your point matters for this business. There are three levels, and only the last one really earns AO2:
| Level | Example | Why |
|---|---|---|
| Name-drop | "Brightwater is a brewery, so…" | True of any brewery. Shows nothing. |
| Quote | "The canning line costs £250,000." | Copied from the case, but not used. Repeating the case is not creditworthy. |
| Use | "Sam has £40,000 of savings and a £100,000 loan offer, so he is still £110,000 short of the £250,000 he needs, which means…" | The evidence does work: it is combined, compared, and pushes the argument forward. |
The strongest answers do something with the numbers in the case. Each of these turns a figure into evidence:
| Move | Example |
|---|---|
| Find a difference | £250,000 needed − £140,000 available = a £110,000 gap |
| Calculate a change | Share price 240p → 180p is a 25% fall |
| Compare to a benchmark | A 5.0% yield against a 3.5% sector average |
| Test a forecast | £300,000 forecast, but 40% less is typical in year one: about £180,000 |
| Put it in proportion | 35% of customers means more than a third of current trade already comes from that area |
| Check it against the objective | £640,000 + £300,000 = £940,000: enough to hit the £900,000 target |
Storytelling is inventing events that are not in the case and building your argument on them. It feels like analysis, but it earns little, because nothing in the case supports it.
"What if" thinking is still allowed, as long as the case gives you a reason: "If Harrogate takes 40% less than forecast, as similar openings in the region have…" is evidence-led, because the case gives you the 40%.
A chain of reasoning is a series of linked steps, each one caused by the step before, ending on the end point in the question. Most students lose analysis marks for two reasons: they jump from the start to the end, or they stop one step too early.
Start with your point, then keep asking "so what?" until you reach the end point in the question. Every answer to "so what?" is a new link.
Evaluation is a reasoned decision, not a summary. Repeating your arguments and saying "it depends" earns very little. To evaluate, you need a way of deciding which argument matters more. These are the tools:
| Tool | Ask | Example |
|---|---|---|
| Time | Is it different in the short term and the long term? | "Probably not in the first year, but the 2029 deadline leaves time to grow." |
| Likelihood and impact | How likely is it? How big would the effect be? | "Losing majority control is certain with the share issue, and permanent." |
| Objectives and priorities | What does this business or owner care about most? | "Grace's priority is to stay fully in control, so the angel's 35% matters more than the speed of the money." |
| Reliability of evidence | Who produced the data? Is it biased, a forecast, a small sample? | "The till survey only asked existing customers." |
| The key condition | What would have to be true for this to work? | "This would only be true if a second head baker is hired first." |
| Stakeholders | Who gains and who loses? Whose view matters most here? | "The family relies on the dividends, so a lower dividend per share hits them directly." |
The most common evaluation mistake is the recap: the conclusion repeats the arguments already made, then adds "I think" at the end. It earns almost nothing, because nothing new has been said. A weighted judgement does something the analysis did not: it compares the arguments and explains why one matters more for this business.
A weighted judgement compares arguments using a criterion: a reason why one matters more than another. Ask these questions about your two strongest arguments:
| Compare by… | Ask |
|---|---|
| Size | Which would have the bigger effect on the end point? |
| Likelihood | Which is more likely to happen, given the evidence in the case? |
| Permanence | Which can be undone, and which can't? A temporary problem usually matters less than a permanent one. |
| Timing | Which matters in the short term, and which in the long term? Which does the question ask about? |
| Priority | Which links to what this owner or business says it cares about most? |
| Evidence | Which argument rests on firmer evidence: a fact, or an untested forecast? |
These phrases force a comparison. A conclusion with none of them is almost certainly a recap.
Good answers do not save all the evaluation for the last paragraph. After each chain, add a short mini-judgement on how strong it is: "This is a strong argument because the case shows…" or "This is less convincing because the forecast is untested." Then the conclusion only has to compare them.
[V] Overall, the second shop is likely to help Fieldstone reach £900,000 by 2029, [B] because demand already exceeds what Otley can supply and a third of current customers already travel from the Harrogate area. [E] Even though first-year sales may fall well short of the £300,000 forecast, the 2029 deadline leaves time to grow beyond a weak start. [U] Unless Priya hires a second head baker first, though, the expansion could hit the revenue objective at the expense of quality.
| Trap | Fix |
|---|---|
| Recapping: repeating both sides again | Compare them using a criterion. Say which wins and why the other loses. Use the recap test. |
| Sitting on the fence | Make a decision. A qualified decision ("yes, if…") is fine; no decision is not. |
| "It depends on many factors" | Name the one factor that decides it, and say which way the case points. |
| A new argument in the conclusion | The conclusion weighs what you have already analysed. New points belong earlier. |
| A verdict on a different question | Check the end point: "should it open?" is not "will it help achieve its objectives?" |
The 6-marker asks for one developed line of reasoning. It rewards depth, not breadth.
Brightwater Brewing is a craft brewery in Leeds run by Sam Okoye as a sole trader. It has nine employees and sells kegs to around 60 independent pubs. Demand has grown every year since 2021.
Sam wants to buy a £250,000 canning line so he can sell cans online and to bottle shops. He has £40,000 of savings to invest. His bank has offered a loan of £100,000 but will not lend more without security against his house. Two regular customers, a pub owner and a former brewery manager, have said they would invest if they could own part of the business. Sam's accountant has suggested converting Brightwater into a private limited company.
A private limited company has limited liability, which means the owners can only lose the money they have invested.AO1 This is good for Sam because if Brightwater fails he will not lose his house. Being a Ltd company also looks more professional, so Brightwater could get more customers. The canning line costs £250,000.AO2
Becoming a private limited company would allow Brightwater to raise share capital, because it could sell shares to new investors who would then own part of the business.AO1 As a sole trader, Sam can only use his own £40,000 and the bank's £100,000, which leaves him £110,000 short of the £250,000 he needs.AO2 This means the two customers who have offered to invest could buy shares, and because shareholders in a Ltd have limited liability, they can only lose what they put in, which makes investing far less risky for them.AO3 As a result, Brightwater is much more likely to close the £110,000 gap and buy the canning line, without Sam having to put his house up as security for a bigger loan.AO3
| Trap | Why it costs marks |
|---|---|
| Analysing two or three different ways | Each shallow chain misses steps, so none reaches Level 2, and the time is lost from the 9 and 15-markers. |
| Copying sentences from the case | Repeating the case is not creditworthy. Use the evidence to support a step: "because he is £110,000 short…" |
| Stopping one step short | "Brightwater can sell shares" is not "Brightwater can fund the canning line". The chain must land on the end point. |
| Adding a conclusion | No AO4 marks are available. It earns nothing. |
A 9-marker is a judgement on one action or issue. Build a chain for, a chain against, then weigh them and decide.
| Level | What it looks like |
|---|---|
| 3 · 7–9 | Good application to the case and logical chains of reasoning. Evaluation that weighs up the arguments and reaches a convincing judgement that fully addresses the question. |
| 2 · 4–6 | Good application, but basic chains of reasoning. Evaluation has some support but may not weigh up the arguments. |
| 1 · 1–3 | Some attempt at application, a lack of relevant analysis, and a judgement that is assertion without support. |
A Level 3 judgement passes three tests.
An artisan bakery in Otley owned by Priya Mann. Revenue last year was £640,000. Priya's objectives are to increase revenue to £900,000 a year by the end of 2029 while protecting Fieldstone's reputation for quality. The shop sells out by 1pm most Saturdays, reviews average 4.8 stars, and a till survey of 200 customers found that 35% live outside Otley, mostly in Harrogate and Ilkley.
Priya plans a second shop in Harrogate. She forecasts it will take £300,000 a year once established, but similar openings in the region have typically taken around 40% less than planned in their first year. The £120,000 fit-out would be funded by a bank loan. Harrogate has three established bakeries, including a branch of a national chain. All recipes come from head baker Tomasz, who works six days a week in Otley.
Opening a second shop in Harrogate could help Fieldstone achieve its objectives because it would be able to sell to more customers. Fieldstone already sells out by 1pm on Saturdays, which shows there is more demand than it can supply in Otley.AO2 A second shop would mean it can sell more bread and pastries, so it would make more money.AO3
However, opening the second shop would be risky. The fit-out costs £120,000 and will be paid for with a bank loan.AO2 Also there are three established bakeries in Harrogate, so Fieldstone may struggle to attract customers. This would mean sales could be lower than expected.AO3
Overall, I think Fieldstone should open the second shop because the demand is there and it has 4.8-star reviews, so it will probably be successful.AO4
The second shop is likely to help Fieldstone reach its revenue objective because demand clearly exceeds what one shop can supply: it sells out by 1pm on Saturdays and has weekday queues.AO2 The till survey also found that 35% of customers already travel from outside Otley, mostly from Harrogate and Ilkley, so a Harrogate shop would capture sales Fieldstone is currently losing.AO3 If the shop takes Priya's forecast £300,000, revenue would rise from £640,000 to £940,000, which means the £900,000 target would be met.AO3
However, the forecast may be optimistic. Similar openings in the region took around 40% less than planned in their first year. On that basis Harrogate would take about £180,000, giving total revenue of £820,000, which leads to an £80,000 shortfall unless the Otley shop grows too.AO2 The till survey only asked existing customers, so it shows where they live, not how many Harrogate shoppers would switch from the three established bakeries they already use.AO3 The second objective is also at risk. Tomasz is the only head baker; if he is split between two sites, quality could slip at both, damaging the 4.8-star reputation that drives demand, so the expansion could undermine the very objective it is meant to achieve.AO3
Overall, the second shop is likely to help Fieldstone reach its revenue objective, but over time rather than in its first year. The deciding factor is whether demand in Harrogate is as strong as the survey suggests: since a third of current customers already travel from that area, Fieldstone is not starting from zero, and the 2029 deadline leaves time to grow beyond a weak first year.AO4 However, this would only be true if Priya hires a second head baker before opening; without one, Fieldstone could achieve its revenue objective at the expense of its reputation for quality.AO4
| Trap | Why it costs marks |
|---|---|
| Arguing only one side | There is nothing to weigh, so the judgement can only have "some support". Likely Level 2, maximum 6. |
| Proposing an alternative action | The question is about one given action. Alternatives are not evaluation of it. |
| "It depends" plus a list | A list is not a judgement. Pick the deciding factor and explain it. |
| A judgement on a different end point | If the question asks about profit, a verdict on whether the business "should do it" or "will be successful" misses the question. |
| Ignoring the qualifier | "Significant", "in the long term" or "increasing" change what you must judge. |
Paper 1 has two quantitative questions, each set as a 9 or a 15-marker. The calculation is a tool for your argument, not the answer.
In a quantitative question, 6 marks are for quantitative skills, awarded in this order:
| Skill | AO | Marks |
|---|---|---|
| Know the formula and select the right numbers | AO1 | 2 |
| Do the calculation correctly | AO2 | 2 |
| Interpret the result in a chain of reasoning | AO3 | 1 |
| Use the result to support the judgement | AO4 | 1 |
The rest of the marks (3 in a 9-marker, 9 in a 15-marker) are for analysis and evaluation of the other information in the case.
Haldane sells kitchenware through 85 stores and online. Over the past year its share price has fallen from 240p to 180p after two poor trading updates, while share prices across the stock market fell as interest rates rose. Haldane kept its total dividend the same as last year, but the directors said it was "paid partly from retained profits". Its customer satisfaction scores are the highest in its sector.
| Haldane Homeware plc | |
|---|---|
| Shares in issue | 50 million |
| Share price a year ago | 240p |
| Share price today | 180p |
| Total dividend paid | £4.5 million |
| Average dividend yield in its sector | 3.5% |
Dividend per share = total dividend ÷ number of shares = £4,500,000 ÷ 50,000,000 = £0.09 = 9p. Dividend yield = dividend per share ÷ share price × 100 = 9p ÷ 180p × 100 = 5.0%.CALC This means an investor buying shares today receives 5p a year in dividends for every £1 invested, well above the 3.5% sector average.AO3 Because the share price has fallen by 25% while the dividend has stayed the same, new investors get more income for their money, so for an investor who buys shares for income, Haldane may be more attractive now than a year ago.AO3
However, the high yield may be a warning rather than an opportunity. The dividend was paid partly from retained profits, which suggests current profits are not covering it.AO2 If poor trading continues, the directors may have to cut the dividend, which leads to a lower yield and possibly a further fall in the share price.AO3 Paying dividends out of retained profit also leaves less internal finance to invest in the stores, which could weaken Haldane's competitiveness.AO3 The 5.0% is also based on last year's dividend: an investor buying now will receive next year's, which may be lower.CHALLENGE
Overall, the fall in share price does not on its own make Haldane an unattractive investment, because a 5.0% yield is well above the sector average and its customer satisfaction scores suggest the business itself is still strong.AO4 Part of the fall also reflects rising interest rates across the whole stock market, not just problems at Haldane. The deciding factor is whether the dividend can be kept: it would only remain attractive if trading improves enough for profits to cover the dividend again. I would want to see the next trading update before investing.AO4
| Error | Fix |
|---|---|
| Mixing pence and pounds | Convert first: 9p ÷ 180p, or £0.09 ÷ £1.80. Never 0.09 ÷ 180. |
| Using the wrong share price for dividend yield | Use the current share price unless the question says otherwise. |
| Percentage change from the wrong base | Change ÷ original value × 100. From 240p to 180p is a 25% fall, not 33%. |
| Shareholding after new shares are issued | Divide by the new total number of shares, including the new ones. |
| Market capitalisation in the wrong units | Shares × share price: 50 million × £1.80 = £90 million. |
| Rounding too early | Keep full figures until the final answer. |
The 15-marker is the biggest question in each section: a third of the section's marks. Analyse two options, both ways, then make a recommendation that a director could act on.
| Level | What it looks like |
|---|---|
| 5 · 13–15 | Application throughout. Well-developed chains of reasoning on both options, using sophisticated concepts where appropriate. Well-supported evaluation that weighs both options and reaches a coherent overarching judgement. |
| 4 · 10–12 | Application throughout and developed chains for both options. Evaluation that is supported, has some balance, and focuses on the question. |
| 3 · 7–9 | Some developed chains of reasoning. Evaluation with some support, but it may lack balance or not be fully focused on the question. |
| 2 · 4–6 | Some basic chains of reasoning. Evaluation with limited support. |
| 1 · 1–3 | Basic application, a lack of relevant analysis, and evaluation that is assertion without support. |
Options must be appropriate. Check every option against four tests before you write:
Every 15-mark case contains one or two facts that the recommendation should turn on. Examiners plant them. Find them before you plan. They usually hide in:
Spend 2–3 minutes planning. A plan like this keeps the answer balanced and stops you running out of time before the recommendation.
There is no "right" option. Examiners reward the quality of the reasoning, so either choice can reach full marks.
Harbour & Hide Ltd makes handmade leather bags in Whitby and employs 22 people. Grace Okafor founded it in 2018 and owns all of its shares. She wants to open a second workshop and showroom in York costing £180,000.
The business has £60,000 of retained profit, but Grace wants to keep £30,000 as a cash reserve. It already has a bank loan, and the bank has offered a further £150,000 over seven years at 8.5% interest. The brand has 60,000 Instagram followers and a loyal online customer base. Grace is proud that every bag is made in Yorkshire and wants to stay fully in control. A business angel has offered £180,000 in exchange for 35% of the shares and a seat on the board.
Choosing the options. The business angel, a bank loan and crowdfunding all fit. Retained profit alone does not: only £30,000 is usable after the reserve. An overdraft is short-term and unsuitable for a building, trade credit is for supplies, and as a Ltd, Harbour & Hide cannot sell shares to the public.
The hinges. Grace owns 100% and wants to stay fully in control, so the angel's 35% and board seat cut across her main priority. The 60,000 followers make crowdfunding realistic. The size of the need (£180,000) also matters: the bank loan only covers it with £30,000 of retained profit added.
On balance, Harbour & Hide should fund the workshop with crowdfunding rather than the business angel. Grace's priority is to stay fully in control, and the angel's offer would cost her 35% of the shares and a seat on the board, permanently.AO4 Crowdfunding lets her keep 100% ownership, and with 60,000 followers and a loyal online customer base, the business is well placed to raise the money; a successful campaign would also promote the York showroom before it opens.AO4 This would change if the campaign failed to reach its target: then the bank loan plus £30,000 of retained profit would be the better fallback, because it still keeps Grace in control, though at the cost of interest on top of the existing loan.AO4
Every 15-mark question rewards the accurate use of a relevant concept or calculation that is not the direct focus of the question. It is a typical feature of a Level 5 answer. These are the sophisticated concepts from the specification (Annex 8) that are Unit 3.1 content:
Challenging the reliability of data or assumptions is formally creditable evaluation, and most students never do it. Ask:
Kestrel makes chilled ready meals in Yorkshire. The Kestrel family, who founded the business, own 21 million of its 40 million shares and rely on the dividends for income. The directors want to raise £20 million to build a new factory that will double capacity. They have two options.
Option 1, a share issue: issue 10 million new shares at 200p each. Kestrel's broker, who would be paid a fee for arranging the issue, says demand from investors would be strong. The family would not buy any of the new shares.
Option 2, a bank loan: borrow £20 million over ten years at a fixed interest rate of 7% a year. Interest rates in the economy are expected to rise over the next two years.
| Kestrel Foods plc | |
|---|---|
| Shares in issue | 40 million |
| Shares owned by the Kestrel family | 21 million |
| Current share price | 250p |
| Profit last year | £6 million |
| Total dividend paid last year | £4 million |
The family currently owns 21 million ÷ 40 million × 100 = 52.5% of Kestrel. After the share issue there would be 50 million shares, so their stake would fall to 21 million ÷ 50 million × 100 = 42.0%.CALC This means the family would lose majority control of the business it founded: other shareholders could together outvote them on decisions such as who runs the company and how much dividend is paid.AO3
The strongest argument for the share issue is that it brings no repayments. Share capital is permanent finance and dividends do not have to be paid in a bad year, so if the new factory takes time to fill, Kestrel is not forced to find money it does not have.AO3 The broker also expects strong demand, which suggests the full £20 million would be raised.AO2 However, the broker is paid a fee for arranging the issue, so its view may be biased.CHALLENGE There is also a cost to the family's income: if the total dividend stays at £4 million, dividend per share falls from 10p to 8p, and the family's dividends fall from £2.1 million to £1.68 million a year.SC
The bank loan avoids both problems. The family keeps 52.5% and full control, and no new shares are created to share the dividend between.AO3 Interest at 7% on £20 million is £1.4 million a year, which last year's £6 million profit would cover, and because the rate is fixed before interest rates are expected to rise, Kestrel locks in a known cost.AO2 But the loan must be repaid whatever happens. Doubling capacity assumes the extra meals will sell, and nothing in the case shows Kestrel has done market research to test this.CHALLENGE If demand is weaker than hoped, repayments would come out of a smaller profit, which leads to lower dividends anyway and more risk to the business.AO3
On balance, Kestrel should use the bank loan. The share issue would cost the family majority control and 20% of their dividend income permanently, while the loan's cost is fixed and covered by current profit.AO4 For a family-founded business that relies on its dividends, keeping control and income matters more than avoiding repayments, because control, once given up, cannot be won back.AO4 This would change if market research showed demand for the extra capacity was uncertain: then fixed repayments would be a serious risk, and a share issue with no repayments would be the safer choice, even at the cost of control.AO4
| Trap | Why it costs marks |
|---|---|
| Analysing one option well and the other briefly | The recommendation needs both sides of both options to weigh. |
| Recommending without comparing | "Option 1 is good because…" is not enough. Say why it beats Option 2 for this business. |
| Type A: choosing options that don't fit | Inappropriate options are not credited, however well they are analysed. |
| Calculating, then never mentioning the number again | The calculation must be used in the argument, or the answer cannot score above 9. |
| Running out of time | The recommendation carries the most marks. Plan, and leave time to write it. |
The specification asks about the links between different parts of Unit 3.1. Many of the best Paper 1 answers start in one topic and finish in another.
Velo Kit Ltd's founder owns 800 of its 1,000 shares. To fund expansion she sells 700 new shares to a business angel.
Before: 800 ÷ 1,000 × 100 = 80%. After: 800 ÷ (1,000 + 700) × 100 = 800 ÷ 1,700 × 100 = 47.1%. She no longer holds a majority, so the angel and other shareholders together can outvote her, and she may have to change decisions or objectives she disagrees with.
The chain starts in sources of finance, runs through ownership, and lands on control and objectives.
Many Paper 1 questions turn on which source of finance suits a business. Work through these factors, and use the case to decide which one matters most:
| Factor | Questions to ask |
|---|---|
| Amount | How much is needed, and can this source provide all of it? |
| Purpose and time | Is it for a long-term asset or a short-term need? |
| Cost | Interest, dividends, or a share of future profits? |
| Control | Does the owner have to give up shares or a say in decisions? |
| Risk | Must it be repaid whatever happens? What if sales are weaker than planned? |
| Legal form | Can this business use it? A sole trader cannot sell shares; a Ltd cannot sell them to the public. |
Paper 1 is 2 hours for 90 marks: about 1 hour per section.
Minutes per section. Spend 2–3 of the 17 minutes planning the 15-marker.
These are the Unit 3.1 formulae from the specification (Annex 7). You must know them; they are not given in the exam.
| Forms of business and shares | |
|---|---|
| Market capitalisation | Number of issued shares × current share price |
| Dividend per share | Total dividend paid ÷ number of ordinary shares in issue |
| Dividend yield (%) | Dividend per share (pence) ÷ share price (pence) × 100 |
| Marketing | |
| Market share (%) | Sales of one product, brand or business ÷ total sales in the market × 100 |
| Market growth (%) | Change in the size of the market over a period ÷ original size of the market × 100 |
| Price elasticity of demand | % change in quantity demanded ÷ % change in price |
| Income elasticity of demand | % change in quantity demanded ÷ % change in income |
| Return on marketing spend (%) | Profit from marketing activities ÷ amount of marketing spend × 100 |
| Costs, revenue and break-even | |
| Variable costs | Variable cost per unit × number of units sold |
| Total costs | Fixed costs + variable costs |
| Revenue | Selling price per unit × number of units sold |
| Contribution per unit | Selling price − variable cost per unit |
| Total contribution | Contribution per unit × units sold, or total revenue − total variable costs |
| Break-even output | Fixed costs ÷ contribution per unit |
| Margin of safety | Actual level of output − break-even level of output |
| Profit | Total revenue − total costs, or total contribution − fixed costs |
| Budget variance | Budgeted figure − actual figure (then state favourable or adverse) |
| Cash flow and liquidity | |
| Payables days | Payables ÷ cost of sales × 365 |
| Receivables days | Receivables ÷ revenue × 365 |
| Current ratio | Current assets ÷ current liabilities |
| Acid test ratio | (Current assets − inventory) ÷ current liabilities |
| Profit and performance | |
| Gross profit | Revenue − cost of sales |
| Gross profit margin (%) | Gross profit ÷ revenue × 100 |
| Operating profit | Gross profit − operating expenses |
| Operating profit margin (%) | Operating profit ÷ revenue × 100 |
| Profit for the year | Operating profit + profit from other activities − net finance costs − tax |
| Profit for the year margin (%) | Profit for the year ÷ revenue × 100 |
| ROCE (%) | Operating profit ÷ (total equity + non-current liabilities) × 100 |
| Return on investment (%) | Profit from the investment (£) ÷ cost of the investment (£) × 100 |
| Gearing (%) | Non-current liabilities ÷ (total equity + non-current liabilities) × 100 |
| Percentages you will use | |
| Percentage shareholding | Shares owned ÷ total shares in issue × 100 |
| Percentage change | (New value − original value) ÷ original value × 100 |
Total equity + non-current liabilities = capital employed.