Business AS Level

3.5.1 Setting financial objectives

The value of setting financial objectives:

• reduce the risk of overspending
• reduce the risk of debt
• maximise profits
• ensures a return on investment

The distinction between cash flow and profit:

-Cash flow: the money going in and out of a business

-Profit: the surplus remaining after total costs are deducted from total revenue

The distinction between gross profit, operating profit and profit for the year:

-Gross profit: the profit a company makes after deducting the costs associated with making and selling its products, or the…