COMPUTATION OF GROSS PROFIT Flashcards
This is an important tool and material needed in the operation of the business. It is the result when sales exceed the cost to produce or manufacture goods/merchandise as well as incurred in selling.
Revenue
It is an advance information that could help us prepare and be ready for any incoming event.
Forecast
___ is the tool used in planning that aims to support management or a business owner in its desire to adjust and cope up with uncertainties of the future
Forecasting
It is the GROSS INCOME and provides information to the entrepreneur about revenue earned sales.
Profit
It refers to the purchase price of the product including the total outlay required in producing it
Cost
The___ measures the percentage of gross profit to sales, indicating the profit that the business realizes from the sale of the product.
Gross profit rate
It is the excess of gross profit from operating expenses and is the second level of revenue in the income statement.
Operating profit margin
The ___ of the business measures the percentage of profit available after deducting the cost of sales & operating expenses of the business.
Operating profit margin
It is a measure of an organization’s profit relative to its expenses
Profitability
It refers tothe efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price.
Liquidity
The most liquid asset of all is ___ itself
Cash
___ isthe ability of a company to meet its long-term debts and other financial obligations. It is also the measure of a company’s financial health, since it demonstrates a company’s ability to manage operations into the foreseeable future.
Solvency
The ___ records all the operating results such as sales, expenses, and profits or losses.
Financial statement
The ___ measures the amount of net income per peso invested to the business.
Return of investment (ROI)
