Profit Flashcards
1
Q
What are the three measurements of profit?
A
Gross profit
Operating profit
Net profit
2
Q
Define a STATEMENT OF ACCOUNT
A
A statement of account is a statement in which the three types of profit are set out in a standard fashion. AKA a profit and loss account.
3
Q
Define PROFITABILITY
A
Profitability measures the profit received against a second variable.
4
Q
How do you calculated a gross profit margin?
A
Gross profit/revenue x 100
5
Q
How do you calculate an operating profit margin?
A
Operating profit/revenue x 100
6
Q
How do you calculate a net profit margin?
A
Net profit/revenue x 100
7
Q
How can a business increase its profitability?
A
- Sell the same quantity at a higher price
- Sell more at the same price
- Reduce costs
