Profit Key Terms

Question 1

Amortisation

Answer 1

The writing off of an intangible asset

Question 2

Cost of Sales

Answer 2

The direct costs of a business

Question 3

Exceptional Costs

Answer 3

A one-off cost such as a large bad debt

Question 4

Gross Profit

Answer 4

The difference between revenue/turnover and cost of sales

Question 5

Gross Profit Margin

Answer 5

Gross profit expressed as a percentage of revenue /turnover

Question 6

Operating Profit

Answer 6

The difference between gross profit and business overheads such as selling and administrative expenses

Question 7

Operating Profit Margin

Answer 7

Operating profit expressed as a percentage of revenue/turnover

Question 8

Profit For The Year (Net Profit) or Net Profit

Answer 8

The difference between operating profit and interest and exceptional items

Question 9

Profit For The Year (Net Profit) Margin or Net Profit Margin

Answer 9

Net profit after tax expressed as a percentage of revenue/turnover

Question 10

Statement of Comprehensive Income

Answer 10

A financial document showing a company’s income and expenditure over a particular time period usually one year

Question 11

Revenue or Turnover

Answer 11

The total income of a business resulting from sales of goods or services