Profits & Profit Margins Flashcards

All 5 cards in this deck

What is the formula for profit?

Profit = total revenue $-$ total costs.

When does a business make a loss?

When total costs are greater than total revenue.

What is interest?

The cost of borrowing money, charged as a percentage of the amount borrowed.

What are the steps to work out the total repayment on a loan?
e.g. a £1,000 loan with 10% interest

1. Find the interest: $10\%$ of $1{,}000 = £100$
2. Add the interest to the amount borrowed: $1{,}000 + 100 = £1{,}100$

True or false? A business with high sales revenue must be making a profit.

False. If total costs are higher than the revenue, the business makes a loss.