2.4

• How can you calculate gross profit?

  sales revenue - cost of sales
• How do you calculate the gross profit margin?

  gross profit ÷ sales revenue x 100
• How can you calculate net profit?

  • sales revenue - total costs
  • gross profit - all other expenses
• How can you calculate net profit margin?

  net profit ÷ sales revenue x 100
• What does ARR stand for?

  average rate of return
• How do you calculate the ARR value?

  average annual profit ÷ cost of investment x 100
• What are the 3 different types of data?

  • marketing data
  • financial data
  • market data
• What is financial data?

  Information about the financial activities and performance of a company or individual.
• What is market data?

  The state of the market that the business operates in. for example, the number of competitors and whether or not the market is growing or declining.
• What is marketing data?

  Data that a business has collected via primary and secondary research.
• Give one reason why a business might use financial data?

  To support a request for a bank loan.
• What are the limitations of financial information?

  • some is historical and there is no guarantee that trends would continue.
  • no explanation for changes in data which could be of more importance.
  • can be easily manipulated to show bias.
  • doesnt show customer or worker opinions
  • doesnt show staff retention or staff turnover