2.3.1 Profit

• Cash - a business asset that can be used immediately.
• Cost of sales - the cost of inventory bought or produced.
• Gross profit = revenue - cost of sales.
• Gross profit margin = (gross profit / revenue) x 100
• Operating profit = gross profit - operating expenses
• Operating profit margin = (operating profit / revenue) x 100
• Profit = revenue - total costs
• Net profit = operating profit - interest and tax
• Net profit margin = (net profit / revenue) x 100
• Profitability - profit as a proportion of sales.
• Statement of comprehensive income - a document to show income and expenditure of a business over a financial year.
• Tax - a charge made by governments on earnings and income of individuals and businesses.