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Revenue / Turnover
The only money coming into the business, everything else on the income statement is an expenditure. Also called sales/ sales revenue
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Cost of Sales
The actual cost of the sales. Typically variable costs such as materials, packaging and possibly even piece rate labour change. This is directly proportional to sales volume, and is a cost per sale. Also known as 'cost of goods sold'.
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Gross profit
The money made on sales once their cost has been deducted (revenue - COS).
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Admin Costs
The cost of all overheads and could be listed seperately as lighting, rent, insurance, advertising, salaries etc...
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Operating Profit / Net Profit (before tax)
The amount of money made after ALL expenses have been paid, but prior to tax being paid
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Tax
Only paid on profit and on a sliding scale so the more profit made the higher the tax bill.
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Operating Profit / Net Profit (After tax)
The amount of money made after ALL expenses have been paid - this is the 'usable' profit that can be reinvested, retained or returned to shareholders as a dividend payment.
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Dividend Payment
The money returned to shareholders as a reward on their investment. Could be anything from £0 upwards, although £0 is very unlikely.
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Retained Profit
Money not returned to shareholders but which is sat in the company's bank account to be reinvested, sat upon or returned later to shareholders. After one year this ebcomes known as 'reserves'
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Other cards in this set

Card 2

Front

The actual cost of the sales. Typically variable costs such as materials, packaging and possibly even piece rate labour change. This is directly proportional to sales volume, and is a cost per sale. Also known as 'cost of goods sold'.

Back

Cost of Sales

Card 3

Front

The money made on sales once their cost has been deducted (revenue - COS).

Back

Preview of the back of card 3

Card 4

Front

The cost of all overheads and could be listed seperately as lighting, rent, insurance, advertising, salaries etc...

Back

Preview of the back of card 4

Card 5

Front

The amount of money made after ALL expenses have been paid, but prior to tax being paid

Back

Preview of the back of card 5
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