5.4b Analysing Profitability Flashcards
1
Q
What do income statements identify?
A
The amount of profit a business has made over a specific period
2
Q
Gross profit margin formula
A
Gross profit margin = (gross profit ÷ revenue) x 100
3
Q
Gross profit formula
A
Gross profit = revenue - cost of sales
4
Q
Net profit formula
A
Net profit = gross profit - expenses
5
Q
Net profit is also known as
A
Operating profit
6
Q
Operating profit margin formula
A
Operating profit margin = (operating profit ÷ revenue) x 100
7
Q
Profit for year margin formula
A
Profit for year margin = (profit for ÷ revenue) x 100
