Edexcel- Profit 2.3 Flashcards
profit
money left over after all the costs have been accounted for
Gross profit formula
Sales revenue- Cost of goods sold
operating profit formula
gross profit- operating expenses
net profit formula
operating profit- Interest and tax expenses
statement of comprehensive income
end of year financial statement that shows all of the businesses income and expenses over the year
profit margin
Amount by which the sales revenue exceeds the costs
gross profit margin
shows the proportion of revenue that is turned into gross profit
gross profit margin formula
gross profit/ revenue x 100
operating profit margin
shows the proportion of revenue that is turned into operating profits
operating profit margin formula
Operating profit/Revenue x 100
Net profit margin
Shows the proportion of revenue turned into net profit before tax
net profit formula
profit for the year/ revenue x 100
Ways to improve profitability
Raising prices
Reducing variable costs
Reducing other costs such as location
Profit
difference between revenue generated and business costs.
Cash
money flowing in and out of business
