Financial decisions (Edexcel GCSE Business): Flashcards
📚Flashcards
Practise the cards
12 cards from this deck
ShowHide
Practise the cards
12 cards from this deck
Gross profit shows
Gross profit shows
Money made from main trading activities before other expenses
Formula for gross profit
Formula for gross profit
Sales revenue - Cost of sales
Another name for gross profit
Another name for gross profit
Gross margin
What net profit represents
What net profit represents
Final profit after all business expenses are deducted
Formula for net profit
Formula for net profit
Gross profit - Operating expenses and interest
Another name for net profit
Another name for net profit
Bottom line
Sales revenue (also called turnover) is
Sales revenue (also called turnover) is
All money from selling products or services
Cost of sales includes
Cost of sales includes
Direct costs of buying, making, & delivering products/services
Operating expenses include
Operating expenses include
Rent, wages, electricity, equipment repairs, loan interest
Two main approaches to improve profit
Two main approaches to improve profit
Increasing revenue and lowering costs
Risk of increasing prices or marketing spend
Risk of increasing prices or marketing spend
May backfire if customers find alternatives or costs exceed gains
Risk of cutting costs too much
Risk of cutting costs too much
May harm quality, service, or morale, reducing long-term profit