PROFITABILITY RATIOS

Question 1

What is gross profit margin

Answer 1

A measure of a firm’s profitability by looking at the relationship between net profit and sales revenue

Question 2

What is the gross profit margin

Answer 2

A measure of how efficiently a business is controlling its variable costs of production: Raw materials, packaging, delivery costs

Question 3

What is the formula for working out grows profit margin

Answer 3

Gross profit divided by sales value multiplied by 100

Question 4

What is operating profit margin

Answer 4

A measure of a firm’s profitability by looking at the relationship between net profit and sales revenue

Question 5

What is the formula for working out the operating profit margin

Answer 5

Operating profit divided by dales revenue multiplied by 100

Question 6

What is operating profit margin a measure of

Answer 6

A measure of how efficiently a business is controlling its fixed costs of production:

Rent
advertising
administration
Salaries

Question 7

What is profit for the year margin

Answer 7

A measure of a firms profitability by looking at the relationship between net profit and sales revenue

Question 8

What is the formula for profit of year margin

Answer 8

Profit of the year divided by sales revenue multiplied by 100

Question 9

What is profit margin of the year a measure of

Answer 9

A measure of how much revenue is being converted into funds that are available for share holders