Question 1 of 3

Question

1. Which profit measure is often used to evaluate the business operating management team because it includes everything they are directly responsible for and does not include the factors that they have little control over?

Answer 1

Operating profit.

Answer 2

Net Income.

Answer 3

Cash on hand.

Answer 4

Don’t know

Answer 5

Gross profit and operating profit mean the same thing.

Answer 6

Gross profit is the operating profit before it has been adjusted to include the effects of interest and taxes.

Answer 7

Gross Profit only considers sales and the Cost of Goods Sold to determine profit. Operating Profit has through items and includes the operations costs – sometimes referred to as fixed cost or overhead costs – included in the calculation.

Answer 8

Don’t know

Answer 9

Net Income.

Answer 10

Gross profit.

Answer 11

Return on assets (ROA).

Answer 12

Don’t know

Question 1 of 3

1. Which profit measure is often used to evaluate the business operating management team because it includes everything they are directly responsible for and does not include the factors that they have little control over?

2. What is the difference between Gross Profit and Operating Profit?

3. Which profit measure gives the best indication of the amount of profit that would be generated if you could sell just one more item?