Eduqas GCSE Business topic area 4 Finance overview quiz quiz

They are simply two completely different words that both mean exactly the same single thing

Profit is revenue minus costs over a period; cash is the money available at a point in time

Cash held by a business is always larger than the profit it makes in a year

Profit is the actual money sitting in the business bank account right now

A bank loan from a bank

An arranged bank overdraft

Retained profit

New share capital

3,000

12,000

250

36,000

Rent on the premises

Raw materials

Packaging used per unit

Wages paid per unit produced

They are exactly the same thing and the two terms can be used interchangeably

Gross profit deducts only the cost of sales; net profit deducts all the other overheads too

Net profit is always a larger figure than gross profit for any business

Gross profit deducts all of the overheads first, whereas net profit does not deduct any of them

1,333 units

2,400 units

3,000 units

24,000 units

7,200 units

3,000 units

700 units

1,200 units

minus 3,000

3,000

39,000

minus 39,000

7,000

minus 3,000

3,000

minus 7,000

60%

25%

40%

250%

15%

150%

12%

30%

Because ARR ignores the timing and risk of the returns and non-financial factors

Because the ARR figure is always completely wrong and can never be trusted at all

Because a high average rate of return always means the business will make a low profit

Because the ARR simply cannot ever be calculated for any machinery or equipment