Gross and Net Profit

What is a common reason for firms to bring back manufacturing processes?

• To minimize supply chain risks

• To increase product prices

• To reduce employee numbers

• To expand globally

If Zaniks PLC has a sales revenue of £550,000 and a cost of sales of £225,000, what is the gross profit?

• £325,000

• £225,000

• £775,000

• £550,000

What is the effect of high fixed costs on GPM?

• It increases GPM

• It has no effect on GPM

• It decimates a high GPM

• It stabilizes GPM

What does GPM stand for in business calculations?

• Gross Profit Margin

• General Profit Measurement

• Gross Product Management

• General Product Margin

What might a high NPM suggest about a firm's management?

• Poor cost control

• Inefficient operations

• Tight cost control

• High employee turnover

Which of the following industries is associated with a high NPM?

• Restaurant dining

• Soft beverages

• Pharmaceuticals

• Entertainment

Which industry is associated with high NPM due to its high value and low volume nature?

• Restaurant dining

• Software

• Soft beverages

• Household products

What is the formula to calculate Net Profit Margin (NPM)?

• (Cost of Sales / Net Profit) x 100

• (Sales Revenue / Net Profit) x 100

• (Gross Profit / Sales Revenue) x 100

• (Net Profit / Sales Revenue) x 100

Which of the following factors can lead to a decrease in Gross Profit Margin?

• Increase in sales price

• Decrease in cost of goods sold

• Increase in production costs

• Decrease in fixed costs

Why might a company with a high Gross Profit Margin still struggle financially?

• High operating expenses

• Strong market position

• Low sales volume

• High employee satisfaction