The Basics
What is Net Profit?
The money a business keeps after all expenses are paid.
If Revenue is $100 and Expenses are $80, name the Net Profit amount.
If a supplier raises ingredient prices, state what happens to the margin.
The margin decreases (goes down).
The term for the total "Top Line" money brought in from all sales.
Revenue.
What is a Percentage?
Profit Margin is always expressed as this type of mathematical figure (%).
A shirt sells for $20 and costs $10 to make. State the Profit Margin %.
50%
True or False: Higher total sales always results in a higher profit margin.
False
The term for costs like rent and utilities that reduce your profit.
Operating Expenses (or Fixed Costs)
What is Gross Profit?
This is the specific name for the money left over after only subtracting the Cost of Goods Sold (COGS).
Total sales are $500 and net profit is $125. State the Profit Margin %.
25%
Name two specific ways a business owner can increase their margin.
Raise prices or lower expenses/cost
The specific term for the point where Profit is exactly $0.
Break-Even Point.