Booklet Notes

Calculating and recording the amount of sales revenue and profit provides a means of comparing the financial performance of a company:

• over a period of time
• with its competitiors

• The owners of the business, such as shareholders
• The employees of the business, such as manager responsible for running different parts of the business
• The competitors who may be interested to see how similar businesses are performing
• Trade unions to see if the business can afford to pay its workers a higher rate of pay.

• The type and size of business
• The objectives of the business
• The demand for the product
• The price consumers are willing to pay
• The way in which the business controls its costs
• The amount of competition
• The cost of setting up a business
• The profit margin of its products

The process of a product starting as raw materials, manufactured in secondary production and then serviced in some way in the tertiary production.

A negative cash-flow balance may:

• only be temporary and may not necessarily cause a problem for the business
• require the business to obtain additional finance in the form of an overdraft to help it overcome a shortage of cash
• mean that the business has to delay payment of money owed until finance is available
• result in the business being unable to buy some equipment until its cash position improves.

• Promotions
• Sale
• Selling the right products
• Alter pricing stratergy
• Good/increased product mix

Exporters benefit -  More goods are sold abroad; possibility of business expansion, increased sales, more employment and rising profits.

Importers have problems - Due to the increase in price of imported goods measured in pounds. As a result, sales could fall, workers may be make redundant and the business could lose if the problem persists. The importer may need to riase the prices to cover the extra costs. Also it could try to buy the same goods from a different country which produces them more cheaply, or whose currency has not fallen again the £.

Exporters have problems - With the effect of the prioce increase in other countries; possibility of sales falling, redundancies and business closure if the problem persists. The exporter may need to reduce their prices, reducing the profit they make per item. Also they could try to export to countries whose currency has not risen instead.

Importers benefit - The cost of imports will fall as few pounds are needed to pay for them. This will mean that sales and profits could rise, more jobs may be created as the business expands.