Theme 2.4 Formulas Flashcards
1
Q
What is the formula for: Gross profit?
A
Sales revenue - Cost of sales (direct costs)
2
Q
What is the formula for: Net profit?
A
Gross profit - Indirect costs (Fixed costs)
3
Q
What is the formula for: Gross profit margin- GPM (%)?
A
(Gross profit/Sales revenue) x 100
4
Q
What is the formula for: Net profit margin- NPM (%)?
A
(Net profit/Sales revenue) x 100
5
Q
What is the formula for: Average rate of return- ARR (%)?
A
(Average annual profit/Cost of investment) x 100
