2.3.1 Profit

• Profit is the financial gain a business makes when its revenue exceeds its costs
• What is the formula for calculating profit?

  $Profit =$$Revenue - Costs$
• Profit is essential for the survival of a business.
• Profit provides funds for operations and debts
• What is one way profit enables business growth?

  Reinvestment
• Profit motivates stakeholders such as employees and shareholders
• Profit indicates the financial health of a business.
• How is profit calculated?

  $Profit =$$Revenue - Costs$
• Revenue shows market demand
• Profit is the excess of revenue over costs.
• What does revenue indicate in a business?

  Market demand
• Profit highlights the financial health
• Profit allows a business to repay its debts.
• Arrange the types of profit in the order they are calculated.

  1️⃣ Gross Profit

  2️⃣ Operating Profit

  3️⃣ Net Profit
• How is gross profit calculated?

  Revenue - Cost of Goods Sold
• Operating profit is calculated after deducting operating expenses from gross profit.
• Net profit is calculated after deducting all expenses, including taxes and interest
• What does gross profit represent for a business?

  Profit before operating expenses
• Match the type of profit with its description:

  Gross Profit ↔️ Profit from sales before operating expenses

  Operating Profit ↔️ Profit from operations before interest and taxes

  Net Profit ↔️ Final profit after all expenses
• Gross profit is the same as operating profit.

  False
• Net profit is the final profit after deducting interest and taxes
• Net Profit is the profit made after deducting all expenses, including taxes and interest
• Gross Profit is calculated as Revenue minus the Cost of Goods Sold
• Order the following types of profit based on their calculation steps:

  1️⃣ Gross Profit

  2️⃣ Operating Profit

  3️⃣ Net Profit
• Match the type of profit with its calculation:

  Gross Profit ↔️ Revenue - Cost of Goods Sold

  Operating Profit ↔️ Gross Profit - Operating Expenses

  Net Profit ↔️ Operating Profit - Interest - Taxes
• Net Profit is the final profit after all expenses are deducted.
• Gross Profit is calculated by subtracting the Cost of Goods Sold
• Operating Profit is calculated by subtracting Operating Expenses from Gross Profit.
• Net Profit is calculated by subtracting Interest and Taxes from Operating Profit
• Order the following profit types based on their increasing complexity in calculation:

  1️⃣ Gross Profit

  2️⃣ Operating Profit

  3️⃣ Net Profit
• Profit is the financial gain a business makes when its revenue exceeds its costs
• Profit is essential for the survival of a business.
• Match the importance of profit with its description:

  Survival ↔️ Funds operations and debts

  Growth ↔️ Enables expansion through reinvestment

  Investment ↔️ Attracts investors and secures loans

  Incentive ↔️ Motivates stakeholders
• Revenue is the total income from sales
• What does the term "Revenue" refer to in business terms?

  Total income from sales
• The term "Costs" in business highlights operational efficiency
• Profit is calculated as Revenue minus Costs.
• What are two reasons why profit is important for a business?

  Survival and growth
• Match the financial metric with its definition:

  Revenue ↔️ Total income from sales

  Costs ↔️ Total expenses incurred
• Gross Profit is calculated as Revenue minus the Cost of Goods Sold