Gross Profit And Net Profit Flashcards
1
Q
What is a fixed cost
A
A cost that stays the same
2
Q
What is a variable cost
A
A cost that changes
3
Q
Examples of fixed costs
A
Rent, bills, tax
4
Q
Examples of variable costs
A
Stock, equipment
5
Q
Revenues formula
A
Quantity x Price
6
Q
Profit formula
A
Revenue - Costs
7
Q
Define gross profit
A
Profit made after deducting the costs to make the product (variable profit)
8
Q
Define net profit
A
Profit after all costs have been taken away
9
Q
Define gross profit margin
A
% of revenue that is being turned into gross profit
10
Q
Formula for gross profit
A
Gross profit
———— x 100
Revenue
11
Q
Formula for net profit
A
Net profit
———- x 100
Revenue
12
Q
What can a business do to improve network profit margin
A
- more sales
- increase prices
- decrease costs
