2.3.1 Profit

Question 1

Profit:

Answer 1

Profit is the revenue left after covering all costs. Calculating profit helps business assess its perfomance.
Profit = TR -TC.

Question 2

Profit margins (%):

Answer 2

calculates for every £1 of revenue, how much profit is made.

Question 3

Gross Profit (GP) & GP %:

Answer 3

GP: Revenue - cost of sales (production).
GP %= gp / revenue X 100.

Question 4

Operations Profit (OP) & OP% :

Answer 4

OP= GP - Other operating expenses.
OP %= op/ revenue X 100.

Question 5

Net Profit (NP) & NP% :

Answer 5

NP = OP - finance/ tax/ interest
NP % = NP divided by revenue X 100