improving profit

Question 1

what is profit

Answer 1

• reward for taking risks and making investments

Question 2

gross profit AND gross margin formula

Answer 2

gross profit = revenue - cost of sales
gross margin %= gross profit / revenue

Question 3

what is operating profit

Answer 3

whats left after all the cost of a business has been taken from revenue

Question 4

operating profit margin formula

Answer 4

operating profit / revenue x 100

Question 5

ways to increasing profit

Answer 5

increase quantity sold
work?= depends on elacsitiy of demand , does business have capacity to sell more?
not work?= fixed costs may rise e.g marketing

selling price =
work?= will work If customers stay loyal , no need for extra capacity
not work ?= competitors likely to respond and customers switch to them