Studied by 4 people
Cost of sales
The direct costs attributable to the production of goods sold by a company, including materials, labor, and manufacturing overhead.
Gross profit
The difference between revenue and the cost of goods sold, representing the profit earned from a company's core business operations before deducting operating expenses.
Expenses
The costs incurred by a business in order to generate revenue, including overhead costs such as rent, utilities, salaries, and marketing expenses.
Retained profit
The portion of net income that a company retains after paying dividends to shareholders (and taxes,expenses,interest), which is often reinvested into the business for growth or used to pay off debt.
Dividends
Payments made by a company to its shareholders as a distribution of profits, usually on a regular basis, representing a return on their investment.
Non-current assets
Longer term(fixed); Bought for business use; examples-Machinery, Property, Trademarks,etc.
Depreciation
How business’s asset’s lose value over time from ‘wear and tear’
Current assets
Short-term Assets that are expected to be converted into cash or used up within one year, including cash, debtors, and inventory
Current liabilities
Debts that must be settled within a year; 3 types- Short term loans, Overdrafts, ‘accounts payable’
Non-current liabilities
Debts to be repaid after 1 year examples- Mortgages, long term bank loans
Net assets
The total assets minus the total liabilities; should be equal to the value of equity in the business
Working capital
the money a company has to cover its short-term expenses, which are due within a year. It's calculated by subtracting a company's current liabilities from its current assets.
Equity
The ownership interest in a company, representing shareholders' residual claim on its assets after deducting liabilities.
Intangible assets
Non-physical assets with value that is derived from rights and privileges, such as patents, trademarks, copyrights, and goodwill.
Goodwill
The premium paid for acquiring a company above its net tangible assets value, representing the value of its reputation, customer base, and other intangible factors.
