Finance AQA yr 1 Jan 6

Which functional objective relates to production (factory) ?

• maximise sales revenue

• increase customer loyalty

• improve efficiency

• improve all staff morale

The M in SMART objectives (targets) :

• manageable

• motivating

• modest

• measurable

Which financial objective is more likely to involve a price cut ?

• sales maximisation

• revenue maximisation

Setting an objective to reduce material costs will :

• reduce fixed costs

• reduce variable costs

• decrease profit

Operating profit =

• gross profit - cost of goods sold

• gross profit + cost of goods sold

• gross profit - expenses

• revenue - cost of goods sold

Overhead expenses are similar to :

• variable costs

• fixed costs

Which is correct ?

• Revenue

  - Cost of goods sold

  = Gross profit

  - Expenses

  = Operating profit

  - Interest and tax

  = (Net) profit for year

• Revenue

  - Expenses

  = Gross profit

  - Cost of goods sold

  = Operating profit

  - Interest and tax

  = (Net) profit for year

Company A : profit = £30m, capital employed = £100m

Company B : profit = £45m, capital employed = £120m

• A is more profitable

• B is more profitable

• no difference

gross profit margin formula =

• gross profit + revenue x 100

• gross profit / revenue x 100

• gross profit x revenue x 100

• gross profit - revenue x 100

operating profit margin = operating profit x 100

?

• expenses

• cost of goods sold

• capital employed

• revenue