Unit 6 - Calculations

Question 1

Average rate of return

Answer 1

Average yearly profit/cost of investment x 100
ARR - compares the average yearly profit from an investment and is stated as a percentage.

Question 2

Gross profit

Answer 2

Revenue - costs

Question 3

Net profit

Answer 3

Gross profit - expenses

Question 4

Gross profit margin

Answer 4

Gross profit/sales revenue x 100

Question 5

Net profit margin

Answer 5

Net profit/sales revenue x 100