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Business AS AQA

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  1. 1-1-the-nature-and-purpose-of-business as
    3 主题
  2. 1-2-forms-of-business as
    5 主题
  3. 1-3-the-external-environment as
    5 主题
  4. 2-1-management-and-leadership as
    3 主题
  5. 2-2-management-decision-making as
    4 主题
  6. 2-3-the-role-and-importance-of-stakeholders as
    3 主题
  7. 3-1-marketing-objectives as
    1 主题
  8. 3-2-understanding-markets-and-customers as
    5 主题
  9. 3-3-making-marketing-decisions as
    2 主题
  10. 3-4-the-marketing-mix as
    7 主题
  11. 4-1-operational-objectives as
    2 主题
  12. 4-2-operational-performance as
    1 主题
  13. 4-3-efficiency-and-productivity as
    3 主题
  14. 4-4-quality as
    1 主题
  15. 4-5-inventory-and-supply-chain-management as
    3 主题
  16. 5-1-financial-objectives as
    2 主题
  17. 5-2-financial-performance as
    6 主题
  18. 5-3-sources-of-finance as
    3 主题
  19. 5-4-cash-flow-and-profit as
    1 主题
  20. 6-1-human-resource-objectives as
    1 主题
  21. 6-2-human-resource-performance as
    1 主题
  22. 6-3-organisational-design as
    3 主题
  23. 6-4-human-resource-planning as
    4 主题
  24. 6-5-motivation as
    1 主题
  25. 6-6-improving-employer-employee-relations as
    2 主题
课 Progress
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Exam code:7131

Profit calculations

  • There are different types of profit in a business. They include the following:

    • Gross profit

    • Profit from operations

    • Profit for the year

  • Each type can be calculated and the results analysed to help inform future business decisions

Gross profit

  • Gross profit is the difference between revenue and the costs directly related to production

  • It is calculated using the formula

Gross space profit space equals space Sales space revenue space minus space Cost space of space sales

Gross profit margin 

  • A profit margin measures the proportion of revenue that is converted into profit

    • Higher and increasing profit margins are preferable, as they mean more revenue is being converted to profit

  • Gross profit margin is expressed as a percentage and calculated using the formula

Gross space profit space margin space equals space fraction numerator Gross space profit over denominator Sales space revenue end fraction space cross times space 100

  • Changes in the gross profit margin indicate how well managers are keeping direct costs low or encouraging sales

    • A rising gross profit margin indicates increasing levels of sales revenue and/or falling cost of sales

    • A falling gross profit margin indicates lower sales revenue and/or a rising cost of sales

Worked Example

An e-scooter manufacturer sells its products to retailers for £180 per unit. Variable costs are £72 per scooter, with monthly fixed costs being £82,000. The manufacturer sells 2,200 scooters a month

The business pays £240 interest on a mortgage each month. It pays corporation tax of £372,000

Calculate the business’s gross profit margin for the year

[3]

Answer:

Step 1: Calculate the gross profit per unit

equals space £ 180 space minus space £ 72 equals space £ 108 (1)

Step 2: Calculate the gross profit per month

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