2.3.1 profit Flashcards
1
Q
gross profit formula
A
gp =total revenue - cost of sales (variable costs)
2
Q
what is operating profit
A
the total income a company generates from sales after paying off all operating expenses such as rent, equipment and inventory costs
3
Q
operating profit formula
A
OP= gross profit - fixed overheads
4
Q
what is net profit
A
the final measure of how much a business has made after every cost has been taken into account
5
Q
net profit formula
A
NP= operating profit - interest
6
Q
how can you increase profit
A
-reduce costs
-increase revenue
-do both
