FLD is a furniture retailer．It has 460 shops and 20000 employees．Internal recruitment is used when recruiting new shop managers．The Managing Director wants to know whether job rotation is the best method of motivation for a large business to use．The Finance Director is reviewing FLD＇s income statement．An extract is shown in Table 2．1．She is concerned that FLD＇s gross profit is decreasing．（a）Define＇profit＇． .......................................................................................................................................

Business

IGCSE&ALevel

CAIE

Exam No：0450_s25_qp_12 Year：2025 Question No：2(a)

Answer:

Award 2 marks for a full definition. Award 1 mark for a partial definition.
- (Total) income of a business (revenue) less total cost [2]
- (Total) revenue minus total costs [2]
- Difference between revenue and total cost [2]
- Gross profit - expenses [2]

Partial definition e.g.
- Revenue minus costs [1]

Other appropriate responses should also be credited.

Knowledge points:

5.3.1.1. How a profit is made

5.3.1.2. Importance of profit to private sector businesses, e.g. reward for risk-taking/enterprise, source of finance

5.3.1.3. Difference between profit and cash

5.3.2.1. Main features of an income statement, e.g. revenue, cost of sales, gross profit, profit and retained profit

5.3.2.2. Use simple income statements in decision- making based on profit calculations (constructing income statements will not be assessed)

Answer:

Knowledge points:

Solution:

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