2.4.1 - Business Calculations (Part A)

Which of the following is the correct formula to calculate a firm’s net profit margin?

• Net profit/sales revenue

• Sales revenue/net profit

• Net profit/sales revenue x 100

• Sales revenue/net profit x 100

Which of the following best describes the proportion (%) of revenue left over after the cost of sales have been paid by the business?

• Net profit margin

• Gross profit margin

• Net profit

• Gross profit

Which of the following is the correct formula to calculate gross profit?

• Sales revenue – total overheads

• Sales revenue + total overheads

• Sales revenue – cost of sales

• Sales revenue + cost of sales

An extract from a firm’s accounts for last year is shown in the table below:

Based on this information, which of the following is the correct gross profit margin for last year?

• 17.54%

• 35.38%

• 47.08%

• 64.62%

Which of the following statements is true if the sales revenue and cost of sales of a business remain the same as last year, but other operating expenses and interest payments increase this year?

• Gross profit will increase this year

• Gross profit will decrease this year

• Net profit will increase this year

• Net profit will decrease this year

Which of the following needs to be subtracted from gross profit to calculate a firm’s net profit?

• Cost of sales

• Overheads

• Interest

• Other operating expenses and interest

Which of the following is the correct formula to calculate a firm’s gross profit margin (%)?

• Gross profit/sales revenue

• Sales revenue/gross profit

• Gross profit/sales revenue x 100

• Sales revenue/gross profit x 100

The following information was provided for a business for last year:

Based on this information, which of the following is the correct gross profit for last year?

• £325,000

• £725,000

• £1,275,000

• £1,675,000

Which of the following best describes the proportion (%) of revenue left over after the business has paid all direct and indirect costs?

• Net profit margin

• Gross profit margin

• Net profit

• Gross profit

An extract from a firm’s accounts for last year is shown in the table below:

Based on this information, which of the following is the correct net profit margin for last year?

• 35.2%

• 44.8%

• 64.8%

• 80.0%