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10 questions
What is Revenue?
is the total amount of income generated by the sale of goods or services
is the difference between aggregate income and total costs and assessment of the financial condition of the enterprise
is the system of indicators of financial results
it the amount of money a business loses every month
The best definition of Profit is:
is the income generated from normal business operations and includes discounts and deductions for returned merchandise
the total amount of money a business spends
the money a business pulls in after accounting for all expenses
is the interest cost that a firm would have to pay for borrowed capital
Product profitability analysis is
a creative way of looking at causes of problems because it helps stimulate thinking and organize thoughts
the amount of profit that a particular product or service makes in a partiular period
a class of financial metrics that are used to assess a business's ability to generate earnings relative to its revenue, operating costs, balance sheet assets
gross profit, which is sales minus the cost of goods sold
Choose the correct denition of Gross Profit:
is the income left over after all expenses, including taxes and interest, have been paid
is the income generated from normal business operations
is total sales minus the cost of goods sold
is equal to how much net income or profit is generated as a percentage of revenue
Revenue =$200,000 Costs of sales =$150,000 Operating expenses (other expenses, taxes) =$ 20,000.
What is the Net profit?
$ 50,000
$ 30,000
$ 130,000
$ 170,000
Revenue = $100,000. Cost of sales =60,000. Operating (other) expenses = $ 10,000.
What is the Gross profit margin ?
$ 30,000
30 %
40 %
10 %
What is the Return on Capital Employed formula ?
(Net income - Dividends) / (Debt + Equity)
Net income / Equity capital
Earnings before interest and tax / (Total assets − Current liabilities)
Earnings before interest and tax / Total assets
You are a house flipper. You purchased a house for $80,000 and spent $30,000 in renovations.
You sale renovated house for $150,000.
What is Return on investment (ROI) ?
$ 40, 000
27 %
20 %
54 %
Net sales = $ 100,000. Earnings before income and taxes (EBIT) = $ 20,000. Net profit = $ 10,000.
What is Return on sales ratio ?
$ 80,000
$ 70,000
20 %
10%
30 %
Why might the Gross profit margin increase ?
Cost of sales have decreased
Cost of sales have increased
Operating (other) expenses have increased
Operating (other) expenses have decreased
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