The Income Statement

Question 1

Learn this

Answer 1

Rev minus COS
gross profit minus other expenses
Operating profit minus tax/interest
=profit of the year

Question 2

COS

Answer 2

Cost of sales
Direct costs n variable related to supply of product /service

Question 3

Gross profit meaning
N formula

Answer 3

Sales rev-cost of sales

Question 4

Operating profit formula

Answer 4

Gross profit - expenses

Question 5

Operating profit is

Answer 5

Also called Gross profit
Other costs to business other than sgock e.g admin ,campaign

Question 6

Net profit formula

Answer 6

Operating profit-interest

Question 7

Margin

Answer 7

Divide it and as a %
GP=SR÷COS×100
OP=GP÷expenses×100
NP=OP÷interest×100

Question 8

NP

Answer 8

Net profit
Amount business earns after deducting
Revenue minus all expenses

Question 9

If not profitable

Answer 9

Company wont last long without changes

Question 10

Expenses=

Answer 10

Interest,indirect costs,electricity

Question 11

Sales=

Answer 11

Rev,income,turnover

Question 12

Increase rev by

Answer 12

A sale /discount ads
Prepare a budget
Asses effect of cost management
Develop new business strategy
Reduce error rate-get tech

Question 13

Revenue formula

Answer 13

Price × number of units sold

Question 14

External source of income

Answer 14

Finance raised from outside business
Eg share capital overdraft bank loan

Question 15

Gross profit margin is n formula

Answer 15

Gross profit ÷sales rev ×100
Shows how well business controls
Production costs
Eg raw materials
,indicator of how efficient business is at making n selling product

Question 16

Net profit margin n formula

Answer 16

Np ÷Sr ×100
Shows how efficiently business controls all expenses .shows how well manages exepenses