2.4 Making Financial Decisions Flashcards
1
Q
Gross profit is
A
The profit after cost of sales is deducted
2
Q
Gross profit=
A
Sales revenue - Cost of sales
3
Q
Net profit is
A
The profit left after all costs have been deducted
4
Q
Net profit=
A
Sales revenue - Total Costs
or
Gross profit - Other operating expenses
5
Q
Gross profit margin =
A
Gross profit/Sales revenue x100
6
Q
Net profit margin=
A
Net profit/Sales revenue x100
7
Q
Average rate of return(ARR) =
A
Average annual profit/Cost of investment x100
8
Q
Average annual profit=
A
Total profit/Total number of years
9
Q
Ways of understanding business performance
A
Changes in costs
Changes in revenue
Gross profit
Net profit
Profit margins
10
Q
When making business decisions, information must be
A
Accurate
Sufficient
Up to Date
11
Q
A
