Lesson 2.3.1a

2.3.1a Profit calculations and profit margins Quiz: Pearson Edexcel Business, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

Lesson 2.3.1a, Profit calculations and profit margins: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 2: Managing business activities, written with Revision Ninja.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. What is deducted from revenue to calculate gross profit?

    • Operating expenses
    • Interest and tax
    • Cost of sales
    • Dividends paid

  2. A business has revenue of £400,000 and cost of sales of £250,000. What is its gross profit?

    • £650,000
    • £250,000
    • £150,000
    • £400,000

  3. What is deducted from gross profit to calculate operating profit?

    • Cost of sales
    • Interest and tax
    • Operating expenses
    • Taxation only

  4. A firm has gross profit of £90,000 and operating expenses of £35,000. What is its operating profit?

    • £90,000
    • £35,000
    • £55,000
    • £125,000

  5. What is deducted from operating profit to calculate profit for the year?

    • Interest and tax
    • Cost of sales
    • Operating expenses
    • Raw material costs

  6. A business has revenue of £600,000, gross profit of £240,000 and operating profit of £90,000. What is its gross profit margin?

    • 40%
    • 37.5%
    • 15%
    • 66.7%

  7. Using the same business, what is its operating profit margin if operating profit is £90,000 on revenue of £600,000?

    • 37.5%
    • 25%
    • 40%
    • 15%

  8. A business has revenue of £800,000 and profit for the year of £64,000. What is its net profit margin?

    • 0.08%
    • 8%
    • 64%
    • 12.5%

  9. What does a higher profit margin indicate about sales revenue?

    • Higher material costs
    • Lower operating profit
    • More retained profit
    • Increased tax liability

  10. Which change will directly increase a business's gross profit?

    • Higher overhead expenses
    • Higher selling price
    • Increased interest payments
    • Lower sales volume

  11. A firm's gross profit margin falls from 35% to 28% while revenue stays at £500,000. What is the change in gross profit?

    • A fall of £28,000
    • A fall of £35,000
    • A fall of £7,000
    • A rise of £35,000

  12. Why is operating profit margin more comprehensive than gross profit margin?

    • Excludes sales revenue
    • Deducts interest payments
    • Ignores raw materials
    • Includes overhead costs

  13. A business has operating expenses of £120,000 on revenue of £1,000,000 and cost of sales of £560,000. What is its operating profit?

    • £320,000
    • £200,000
    • £440,000
    • £120,000

  14. Which action will directly improve a business's gross profit margin?

    • Higher interest charges
    • Lower supplier prices
    • Lower sales volume
    • Increased rent expenses

  15. A firm's profit for the year is £40,000 after interest of £6,000 and tax of £14,000. What is its operating profit?

    • £60,000
    • £40,000
    • £20,000
    • £80,000

  16. Which measure of profit is calculated before interest and tax are deducted?

    • Profit for year
    • Net profit
    • Gross profit
    • Operating profit

  17. A business's net profit margin is 5% on revenue of £2,000,000. What is its profit for the year?

    • £10,000
    • £20,000
    • £400,000
    • £100,000

  18. Which factor directly reduces a firm's gross profit margin?

    • Higher material costs
    • Lower overhead expenses
    • Higher selling prices
    • Lower interest charges

  19. Why is profit for the year usually lower than operating profit?

    • Increased overhead expenses
    • Lower sales revenue
    • Interest and tax
    • High material costs

  20. A business reduces its overheads by £15,000 with revenue and cost of sales unchanged. How does operating profit change?

    • It rises by £30,000
    • It rises by £15,000
    • It falls by £15,000
    • It is unchanged

All Pearson Edexcel Business quizzes