2.3.1 - PROFIT

Question 1

What is Profit?

Answer 1

the financial gain of a business through trading and can be found be deducting expendixture from income

Question 2

What is the Formula for Profit?

Answer 2

P = Total Revenue - Total Costs

Question 3

What is the Formula for Gross Profit?

Answer 3

GP = Sales Revenue - Cost of Sales

Question 4

What is the Formula for Operating Profit?

Answer 4

Gross Profit - Expenses

Question 5

What is the Formula for Net Profit?

Answer 5

NP = Operating Profit - Interest

Question 6

What is the Formula for GP Margin, OP Margin, NP Margin?

Answer 6

GP / SR x100

OP / SR x100

NP / SR x100

Question 7

What are 3 Ways to Improve Profitability?

Answer 7

• REDUCE COST
• INCREASE REVENUE
• USE Existing RESOURCES MORE EFFICIENTLY

Question 8

What is an Income Statement?

Answer 8

a historical record of the trading of a business over a specific period (normally one year).
shows the profit or loss made by the business

Question 9

What is Gross Profit?

Answer 9

the DIFFERENCE between REVENUE and COST OF SALES

Question 10

What is Operating Profit?

Answer 10

the DIFFERENCE between GROSS PROFIT and BUSINESS OVERHEADS, such as selling and administrative expenses.

Question 11

What is Net Profit?

Answer 11

the DIFFERENCE between OPERATING PROFIT and INTEREST