Profit

Question 1

Gross profit formula

Answer 1

Revenue - Cost of sales

Question 2

Gross profit explained

Answer 2

Profit once direct costs are met

Question 3

Operating profit

Answer 3

Gross profit - operating expenses

Question 4

Operating profit explained

Answer 4

Difference between

gross profit and overheads (indirect costs, e.g. selling, administrative)

Question 5

Net profit (profit for the year)

Answer 5

Operating profit - Interest (and exceptional costs)

Question 6

Net profit (profit for the year) explained

Answer 6

Difference between

interest paid by business (e.g. on loans) and interest received by business (e.g. on money in deposit accounts)