Profit Flashcards
When judging financial performance, what should profit be compared to?
The profits made in previous years. The profits of competitors.
Do all businesses seek to make a profit?
No - organisations such as charities and school are not seeking profits.
List three people/groups interested in the profits made by a business?
Owners. Employees. Competitors. Trade unions.
Define dividends.
The part of a company’s profit paid out to shareholders of limited companies.
What is the formula for net profit?
Gross profit - expenses (running costs)
True or false - profit is a reward for taking risks.
True. The owners invest their money and look for a return.
How is sales revenue calculated?
Selling price x quantity sold
Define drawings.
Business profits paid to the owners of sole traders and partnerships.
What is the formula for gross profit?
Sales revenue - cost of goods
List 5 factors that will influence the amount of profit a business makes.
The size of the business. The objectives of the business. Demand. Price consumers are willing to pay. How well costs are controlled. Amount of competition.
