Profit
Revenue - Costs
Gross Profit
Revenue - Cost of Sales
Net Profit
Revenue - All Costs
Net Profit Margin
is amount of profit that an organisation is making expressed as a %.
Net Profit
------------------- X 100
Turnover
the greater the profit margin, the better the organisation is performing.
Gross Profit Margin
is amount of profit an organisation is making on each item sold expressed as a %,
Gross Profit
-------------------- X 100
Turnover
the greater the gross profit margin, the better the organisation is performing.
Gross profit margin should always be HIGHER than net profit margin
Return on Capital
% return on a capital investment
used to measure return gotten from your investment in the business.
Net Profit
---------------- X 100
Capital
Invested
Improving Profitability
Increase selling price
Reduces demand
depends on price elasticity
Reduce costs
Reduces quality
Damage reputation
Reduce added value
Revenue - Costs
Gross Profit
Revenue - Cost of Sales
Net Profit
Revenue - All Costs
Net Profit Margin
is amount of profit that an organisation is making expressed as a %.
Net Profit
------------------- X 100
Turnover
the greater the profit margin, the better the organisation is performing.
Gross Profit Margin
is amount of profit an organisation is making on each item sold expressed as a %,
Gross Profit
-------------------- X 100
Turnover
the greater the gross profit margin, the better the organisation is performing.
Gross profit margin should always be HIGHER than net profit margin
Return on Capital
% return on a capital investment
used to measure return gotten from your investment in the business.
Net Profit
---------------- X 100
Capital
Invested
Improving Profitability
Increase selling price
Reduces demand
depends on price elasticity
Reduce costs
Reduces quality
Damage reputation
Reduce added value