📊 Part 1: Understanding Profit

1. What is the formula for calculating gross profit?

Revenue - Total Expenses

Revenue - Cost of Goods Sold

Sales - Net Profit

Total Income - VAT

2. What is the formula for calculating net profit?

Revenue - Cost of Goods Sold

Gross Profit - Total Expenses

Sales - VAT

Revenue - Fixed Costs only

3. Which of the following are examples of expenses that reduce gross profit to net profit? (Tick all that apply)

Rent

Staff wages

Cost of goods sold

Insurance

Advertising costs

💷 Part 2: Profit Calculations

4. Bella's Bakery has the following monthly figures:
Revenue: £8,500
Cost of goods sold: £3,200
Rent: £1,500
Staff wages: £2,100
Insurance: £200

Calculate the gross profit:

5. Using the same data from question 4, calculate the net profit:

6. TechRepair Ltd has these annual figures:
Revenue: £45,000
Cost of goods sold: £18,000
Total expenses: £15,500

Calculate both gross profit and net profit:

7. A business has a gross profit of £12,000 and total expenses of £8,500. What is the net profit?

Net profit = £ ___________

8. If a company's revenue is £25,000 and its net profit is £4,000, whilst its total expenses are £9,000, what is the cost of goods sold?

🎯 Part 3: Business Analysis

9. Compare these two businesses and explain which has better profitability:
Business A: Revenue £20,000, Gross profit £8,000, Net profit £2,000
Business B: Revenue £15,000, Gross profit £7,500, Net profit £3,500

10. A restaurant has a gross profit of £15,000 but a net profit of only £1,000. Suggest two ways the business could improve its net profit: