consulting

revenue/sales

amount of money a business receives for providing goods/services (units sold * price per unit)

fixed costs

costs that aren’t dependent on goods/services produced (rent, interest)

costs of goods sold (COGS) / costs of sales

direct costs that are put towards producing goods/providing services (assumed to be variable)

variable costs

costs that change as goods/services change (raw materials, delivery costs). variable cost/unit = total variable costs / units sold

gross profit

business income that remains after variable costs are subtracted from revenue

operating expenses

costs not directly linked to goods/services (renting office space, hiring of non-office employees), assumed to be fixed costs

operating profit/income

gross profit - operating expenses

net profit

revenue - costs

market share

portion of industry controlled by business (firm revenue / industry revenue)

complementary goods

products consumed together that have a mutually beneficial relationship - increase of purchase in one leads to increase in other (iPhones and apps)

substitute goods

products used interchangeably (different types of milk)

expected profit

profit weighted by probability of all possible outcomes