T-level finance SOPL cash flow

What is the formula to calculate Gross Profit?

• Sales Revenue - Cost of Goods Sold

• Sales Revenue - Total Expenses

• Sales Revenue - Net Profit

• Sales Revenue + Fixed Costs

Which of the following is an example of a Variable Cost?

• Rent

• Energy Bills

• Cost of Raw Materials

• Wages

Fixed costs are:

• Costs that increase as production increases

• Costs that remain constant regardless of production levels

• Costs of raw materials

• Costs that only occur when production begins

What does Net Profit represent in a Statement of Profit or Loss?

• Revenue after tax and all expenses

• Revenue minus cost of raw materials

• Revenue minus fixed costs

• Gross profit minus tax

A Cash Flow Statement provides information about:

• The company’s net profit

• The inflows and outflows of cash within a specific period

• The company’s total revenue and expenses

• The company's assets and liabilities

A Cash Flow Forecast helps a business to:

• Identify future sales trends

• Plan for future cash inflows and outflows

• Calculate gross profit

• Determine their break-even point

Negative cash flow occurs when:

• Cash inflows are greater than outflows

• Cash inflows and outflows are equal

• Cash outflows exceed inflows

• The business has no fixed costs

Why is positive cash flow vital for a business?

• To cover day-to-day expenses and reinvest in growth

• To avoid paying taxes

• To increase fixed costs

• To maintain high levels of inventory

Sales Revenue is the total amount a business earns from selling its goods or services.

• True

• False

Gross Profit is calculated by subtracting fixed costs from sales revenue.

• True

• False