Profit Margins

When is a business making a profit?

• When revenues are higher than costs
• When revenues equal costs
• When revenues are less than costs

What is the definition of Revenue?

• The money made on products

• Income from the cost of goods and services 
• Income from the sales of goods and services

• Cash coming into the business from suppliers and customers

How do you calculate Gross Profit Margin?

• gross profit / sales (revenue) x 100

• gross profit x sales (revenue) / 100

• gross profit / sales (revenue) / 100

• gross profit x sales (revenue) x 100

Tags

CCSS.7.RP.A.3

How do you calculate Net Profit Margin?

• net profit / sales (revenue) x 100

• net profit x sales (revenue) / 100

• net profit / sales (revenue) / 100

• net profit x sales (revenue) x 100

Suppose one year Company A’s REVENUE is 50k and its total EXPENDITURES are 25k making its profit margin ____?

• 0%

• 25%

• 50%

• 75%

• 100%

How do you calculate revenue?

• sales x price

• price x cost

• cost + sales

• sales - total price

Net Profit includes all operating costs

• False

• True

Gross Profit Margin should be greater than Net Profit Margin?

• True

• False

Gross profit includes which costs

• Cost of product and revenue

• Wages

• Rent

• Average Rate of Return

Net profit includes:

• Direct Costs

• Indirect Costs

• Revenue

• Average Rate of Return