Business revision cards

Revenue= Price x Number sold

Variable= Cost x no.sold

Total cost= Fixed + variable

Profit= Revenue - cost

Fixed cost- Do not change based on sales.

Variable cost- These do change based on sales.

cost- money going out.

Revenue- Money going in.

Profit- Money that is earned in a business after paying the cost of selling and producing goods.

Margin of safety- The amount that a business's current level of production exceeds its break even level of output

Fixed cost:

• Rent
• Uniform
• Storage
• salary

Variable cost:

• equipment
• utilities
• wages
• Ingredients

Advantages

• Helps you to see how much loss or profit you could make
• Helps you to see if business is realistic enough to setup

Disadvantages

• not always accurate as it is a prediction
• They take time

opening Balance- The amount of money in the business bank account at the start of the period (start with)

Income per period- The amount of money expected in the bank account in that month (money coming in)

Expenditure per period- The amount expected to leave the bank account in that month (Money going out)

Closing Balance- Amount expected in the bank account at the end of the period (The money at the end)

Cash flow- movement of money in and out of the business bank account.

Inflow

• Sales revenue
• Capital
• Loans
• Grants

Outflow

• Wages
• Rent
• Advertising
• Stock
• Purchases

Net cashflow= Income -  expenses

Closing balance= Income - expenses + openening balance

Opening Balance= Closing balance from previous month

Calculates the profit and loss made by a business in the last 12 months

Profit= Revenue - costs

Gross profit= revenue - cost of goods sold

Net profit= Gross profit - expenses

COGS= cost directly related to making a product :

• Ingredients
• staff wages (employees)

Partnership:

• Expand
• Train staff
• Better quality supplier
• new machinery
• Pay rise
• rennovate
• Buy buildings

Assets  - what a business owns

Liabilities - what a business owes (its debts)

Current assets - somethhing you own ( cash or can easily be turned into cash )

Non current assets - something you own ( lasts a long time in the business )

Non current liabilities - a debt/something you owe ( pay up in over a year)

Current liabilities - a debt/somethong you owe (pay up to within a year)

Debtor - (reiceivables) - sombody whos owes you money

Trade credit- (payables) -supplier you owe money to

Net current assets (working capital)= current assets - current liabilities

Net assets= Total assets - current liabilities