Economics B 1.6.3

What are the three types of profit mentioned when analyzing the success of a business?

• Gross profit, operating profit, and profit for the year

• Operating profit, net profit, and revenue profit

• Gross profit, net profit, and total profit

• Sales profit, operating profit, and gross profit

What does Gross Profit represent in a business's financial analysis?

• The total sales revenue minus the cost of sales

• The total revenue minus operating expenses

• The total sales revenue minus taxes

• The total sales revenue minus net profit

According to the example provided, what was the gross profit for Sparkling Crystal Ltd for the year 2014-15?

• £6,000

• £8,000

• £14,000

• £20,000

Which of the following is NOT included in the cost of sales (COS)?

• Raw materials for manufacturing

• Supplies needed for the production line

• Labour of company staff working on each product

• Office administration costs

How is the Cost of Sales calculated for a retailer?

• Opening stock + Stock bought + Closing stock

• Opening stock + Stock bought - Closing stock

• Opening stock - Stock bought + Closing stock

• Opening stock - Stock bought - Closing stock

What does Operating Profit show for a business?

• The profit left after deducting raw materials cost only

• The profit left after deducting sales revenue

• The profit left after deducting other operating costs and fixed costs

• The profit left after deducting taxes and dividends

Why do many business analysts prefer looking at operating profit rather than gross profit?

• Because it shows the amount of stock left at the end of the year

• Because it gives a more realistic idea of how much profit the business has really made

• Because it includes taxes and dividends

• Because it is easier to calculate

What is Net Profit calculated as in a company's statement of comprehensive income?

• Operating Profit + Interest

• Gross Profit - Other Operating Expenses

• Operating Profit - Interest

• Gross Profit - Interest

What would make a company look very undesirable to investors?

• A positive gross profit

• A positive operating profit

• A negative net profit

• A positive net profit

What is the GROSS PROFIT for Sparkling Crystal Ltd in 2014-15 according to the Profit and Loss Account?

• £5000

• £8000

• £14000

• £4305