GP, NP, GPM, NPM

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Description and Tags

Business

GCSE Business Studies

OCR

Operations, Finance and Influences on Business

9 Terms

1
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gross profit
used to calculate which products make more profit for a business
2
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net profit
the actual profit a business makes after taking account of all costs
3
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gross profit margin
comparing the total revenue earned by the business with the cost of the sales it markets
4
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net profit margin
comparing the gross profit the business earns with its expenses
5
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GP equation
GP=SR-VC
6
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NP equation
NP=SR-TC or NP=GP-FC
7
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GPM equation
GPM=(GP/SR)X100
8
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NPM equation
NPM=(NP/SR)X100
9
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what do npm and gpm tell the business
it tells the business how profitable it is and if it is performing well