ESB - Domain 4 Questions and Answers
Selling price formula -Answer- (cost x desired profit margin) + cost
Profit margin formula -Answer- (percentage/100) = decimal
Balance sheet -Answer- A financial statement that reports assets, liabilities, and owner's
equity on a specific date.
Equity -Answer- Assets - Liabilities
Net income -Answer- total income - cost of goods sold - expenses
Gross profit -Answer- income - cost of goods
Income tax expense -Answer- Gross profit x tax rate
Break even point -Answer- total monthly cost / selling price
Burn rate -Answer- month starting balance - month ending balance
ending cash balance -Answer- total cash - total cost
run rate -Answer- current revenue x 12
net profit -Answer- value of investment - cost of investment
Return on Investment -Answer- Net profit (cost of investment) x 100
Operating budget -Answer- budget for day-to-day expenses
Return on Investment (ROI) -Answer- Used by businesses to show how much their
investments are earning.
Desired Profit Margin -Answer- The percentage the business wants to earn on products
or services
Selling Price -Answer- The price of the product or service you are buying. Selling
price=(cost x desired profit margin)+ cost
Liabilities -Answer- money owed to others
Income Statement -Answer- A financial statement showing the revenue and expenses
for a fiscal period.
Selling price formula -Answer- (cost x desired profit margin) + cost
Profit margin formula -Answer- (percentage/100) = decimal
Balance sheet -Answer- A financial statement that reports assets, liabilities, and owner's
equity on a specific date.
Equity -Answer- Assets - Liabilities
Net income -Answer- total income - cost of goods sold - expenses
Gross profit -Answer- income - cost of goods
Income tax expense -Answer- Gross profit x tax rate
Break even point -Answer- total monthly cost / selling price
Burn rate -Answer- month starting balance - month ending balance
ending cash balance -Answer- total cash - total cost
run rate -Answer- current revenue x 12
net profit -Answer- value of investment - cost of investment
Return on Investment -Answer- Net profit (cost of investment) x 100
Operating budget -Answer- budget for day-to-day expenses
Return on Investment (ROI) -Answer- Used by businesses to show how much their
investments are earning.
Desired Profit Margin -Answer- The percentage the business wants to earn on products
or services
Selling Price -Answer- The price of the product or service you are buying. Selling
price=(cost x desired profit margin)+ cost
Liabilities -Answer- money owed to others
Income Statement -Answer- A financial statement showing the revenue and expenses
for a fiscal period.
