Questions on profit and loss 1.0 / 5 based on 1 rating ? Business StudiesProfitGCSEAQA Created by: Amelia Cantwell-HydeCreated on: 17-10-15 19:04 1. What does the profit of loss account show? It shows if a business has made a profit or a loss over the last financial year 1 of 13 2. What does sales revenue mean? The money coming into the business 2 of 13 3. What does cost of sale mean? The cost to make the product 3 of 13 4. What does gross profit mean? Sales revenue take the cost of sales 4 of 13 5. What does overheads/expenses mean? Bills not to do with making the product such as rent 5 of 13 6. What does net profit mean? Money kept inside the business 6 of 13 7. What does dividends mean? Money paid to shareholders 7 of 13 8. What does retained profit mean? Money kept inside the business 8 of 13 9. What does the gross profit margin show? It shows the gross profit per £1 of sales. For example if it is 40% for every £1 of revenue, 40p is gross profit 9 of 13 10. What does the net profit margin show? It shows the net profit per £1. For example if it is 20% for every £1 of revenue, 20p is profit. 10 of 13 11. Jake's jam has a gross profit margin of 70%. The average for the industry is 40%. What does this mean? Jake's jam is running much more efficiently. It is turning revenue into gross profit much more efficiently. 11 of 13 12. Clare's cakes has a gross profit margin of 20%. The average for the industry is 50%. What does this mean? She isn't turning revenue into gross profit as efficiently as other bakeries in the industry. 12 of 13 13. How do you know if your business has a good profit margin? •Compare it to the industry average •Look at what profit margin you had last year 13 of 13
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