2.4 - making financial decisions Flashcards
1
Q
gross profit =
A
Sales revenue - cost of sales
so it’s the amount you make selling your product - the amount it cost you to make your products
2
Q
Net profit =
A
Gross profit - Other operating expenses and interest
overall profit or loss
3
Q
gross profit margin =
A
(Gross profit/ sales revenue) x 100
the higher the better
4
Q
Net profit margin =
A
(net profit/sales revenue) x 100
The higher the better
5
Q
Average rate of return =
A
(total profit/number of years) / Cost of investment
the higher the better
6
Q
Percentage change =
A
(Final value - initial value)/ initial value
