selling price x quantity sold in a given time period
1 of 15
cost of sales
cost of raw materials or stock. purchased to produce/supply a product/service
2 of 15
gross profit
revenue - cost of sales
3 of 15
operating profit
gross profit - expenses
4 of 15
net profit for the year
operating profit - interest/tax and non operational expenses
5 of 15
gross profit margin
(gross profit / sales) x 100
6 of 15
operating profit margin
(operating profit / sales) x 100
7 of 15
net profit for the year margin
(net profit for the year / sales) x 100
8 of 15
what does the ratio tell us?
this ratio shows that for every £1 of sales they have made (% number) pence (gross profit, operating profit, net profit). the higher the percentage the better
9 of 15
improving profitability- sales
increase quantity sold and increase price
10 of 15
improving profitability- costs
lower costs and lower wastage
11 of 15
improving profitability- labour
improve training to improve knowledge and skills of staff. boost output and productivity
12 of 15
profit
sales - costs = profit
13 of 15
cash
money in the bank and assets (e.g. stock) that are easily converted into money
14 of 15
asset
what a business owns e.g. stock, equipment
15 of 15
Other cards in this set
Card 2
Front
cost of raw materials or stock. purchased to produce/supply a product/service
Back
cost of sales
Card 3
Front
revenue - cost of sales
Back
Card 4
Front
gross profit - expenses
Back
Card 5
Front
operating profit - interest/tax and non operational expenses
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