Finance

Question 1

What is an INCOME STATEMENT?

Answer 1

An income statement is:

. FINANCIAL STATEMENT it show how INCOME has CHANGED over TIME

Question 2

How many parts does an INCOME STATEMENT have?

Answer 2

. INCOME STATEMENT has 3 PARTS:

1. Trading Account - shows GROSS PROFIT or LOSS
2. Profit and Loss Account - shows NET PROFIT
3. Appropriation Account - where the profit has gone - to GOVERNMENT as taxes
   - to SHARE HOLDERS as dividends
   - kept in the business as RETAINED profit

Question 3

How to find GROSS PROFIT MARGIN

Answer 3

GROSS PROFIT MARGIN = GP
_________ x 100%
Sales Revenue

Question 4

How to find NET PROFIT MARGIN

Answer 4

NET PROFIT MARGIN = Net Profit
_________ x 100%
Sales Revenue