Gross Profit Margin

What is the formula for calculating Gross Profit Margin?

• Gross Profit Margin = (Gross Profit / Revenue) x 100.

• Gross Profit Margin = (Revenue - Cost of Goods Sold) / Revenue x 100.

• Gross Profit Margin = (Net Income / Total Assets) x 100.

• Gross Profit Margin = (Operating Income / Total Revenue) x 100.

If a business has a revenue of $100,000 and COGS of $60,000, what is the Gross Profit Margin?

• 30%

• 35%

• 40%

• 45%

If a product costs $30 to make and is sold for $50, what is the Gross Profit?

• $10

• $15

• $20

• $25

What is Revenue?

• Revenue is the income generated from the sale of goods and services.

• Revenue is the total expenses incurred by a business.

• Revenue is the profit made after all expenses are deducted.

• Revenue is the amount of money invested in a business.

What happens if the Gross Profit Margin is low?

• A low Gross Profit Margin may indicate high production costs or pricing issues.

• A low Gross Profit Margin suggests that the company is highly profitable.

• A low Gross Profit Margin means the company has no expenses.

• A low Gross Profit Margin indicates that sales are increasing rapidly.

If a company has a Gross Profit of $200,000 and Revenue of $500,000, what is the Gross Profit Margin?

• 30%

• 35%

• 40%

• 45%

What is the relationship between Gross Profit and Gross Profit Margin?

• Gross Profit is the total revenue, while Gross Profit Margin is the cost of goods sold.

• Gross Profit is the dollar amount, while Gross Profit Margin is the percentage of revenue that exceeds COGS.

• Gross Profit is the profit after taxes, while Gross Profit Margin is the profit before taxes.

• Gross Profit is the revenue minus operating expenses, while Gross Profit Margin is the total revenue.

What does it mean if a business has a Gross Profit Margin of 50%?

• It means that for every dollar of revenue, the business retains 50 cents after covering the cost of goods sold.

• It indicates that the business has a 50% market share in its industry.

• It shows that the business's total expenses are 50% of its revenue.

• It suggests that the business is losing money on every sale.

If a product is sold for $20 and the cost to produce it is $15, what is the profit?

• $3

• $4

• $5

• $6

What does it mean when revenues are higher than costs?

• The business is making a profit.

• The business is incurring a loss.

• The business is breaking even.

• The business is experiencing cash flow issues.