Profitability ratios

Front

Revenue = £100,000
Cost of sales = £50,000
Other expenses = £25,000
What is the gross profit?

Back

£50,000

Front

Who has the best gross profit margin? Options: Company A: 4%, Company B: 7%, Company C: -3%, Company D: 1%

Back

Company B: 7%

Front

Revenue = £80,000
Cost of sales = £30,000
Other expenses = £10,000
What is the total operating profit?

Back

£40,000

Front

What is the gross profit margin if Revenue = £100,000, Cost of sales = £50,000, and Other expenses = £40,000?

Back

50%

Front

What will impact the gross profit margin? Options: Cost of sales increase, Decrease in operating (other) expenses, Sales price charged remaining the same, Increase in operating (other) expenses

Back

Cost of sales increase

Front

What is the operating profit margin formula?

Back

Operating profit / Total revenue x 100

Front

Why might the gross profit margin go down when a product is price inelastic?

Back

firm charging lower prices

Front

A fall in the gross profit margin might suggest ____

Back

that suppliers are charging higher prices

Front

What are retained profits?

Back

Profits that are kept & reinvested into the business

Front

Total revenue = £100,000
Cost of sales = £70,000
Operating (other) expenses = £10,000
What is the operating profit margin?

Back

20%