Types of Profit Flashcards
1
Q
What is gross profit and how is it calculated
A
Revenue- total cost of sales
Gross profit is the main type of profit used to measure performance
2
Q
What is operating profit and how is it calculated
A
Gross profit- other expenses
is a more accurate measure of running profits as a business
3
Q
What is Profit of the year
A
Profit of the year is gross profit plus all additional income streams i.e. selling of long term assets as well the interest the business may have gained.
Minus taxes that are being payed by the firm
