Gross Profit (GP) refers to:

• Income from the sales of goods and services

• Revenue minus cost of sales

• Revenue minus cost of sales and operating expenses

• Revenue minus cost of sales, operating expenses, and corporate charges

A high GP / revenue % means that the company is:

• Successful in generating more revenue

• Not successful in generating more revenue

• Successful in generating revenue, considering the cost of sales

• Not successful in generating revenue, considering the cost of sales

Company XYZ reported an increase in expense / revenue % in the last financial year. Which measure is the management NOT likely to take?

• Bring in more products to sell

• Freeze manpower hiring

• Increase headcount in back office to strengthen process control

• Optimize office expenses to improve performance

A high waste / revenue % indicated that the company may need to:

• Review inventory holding and speed up AR collection

• Fire more employees

• Improve employee productivity

• Reduce fixed expenses

Answer explanation

As waste includes the provision for AR and inventory, the company may need to reconsider this in order to reduce the waste / revenue %.

The following is the report of the AWC / MAR % for the financial year. Which quarter show the best figure?

• Quarter 1 - 30%

• Quarter 2 - 33%

• Quarter 3 - 31%

• Quarter 4 - 27%

Company XYZ generated $1m from the sales of goods and services in the last financial year. The cost of sales was $200,000. The amount that they spent to operate the business was $100,000, and the corporate charges were another $100,000. What is the EBIT?

• $1,000,000

• $800,000

• $600,000

• $200,000

Which of the following statements about GP per manager is true?

• This is applicable for managers Grade 5 and above

• This measures how much money is invested in each manager

• A high GP per manager indicated that the workforce is very productive

• This measures how much commission a manager makes