Financial decisions: Business: Pearson (Edexcel): GCSE (9:1)

Line chart

A graph showing levels or amounts over time

Bar graph

A graph showing levels or amounts

Pie chart

A round chart showing percentages and proportions

Financial data

Costs and revenues, gross and net profit, profit margins and cash flow

Marketing data

Market trends, product lifecycle and information from customers

Sales revenue

All money received in exchange for the sale of goods and services

Cost of sales

How much it costs to produce a product or supply a service,

Gross profit

The difference between all revenue from selling goods and services minus the variable costs of producing them

Net profit margin

The difference between all revenue from selling goods and services minus the total costs (fixed and variable) of producing them

Shareholders

Individuals who have invested in a Private or Public company and own a part of the business

Return on capital employed (ROCE)

How much profit is made as a proportion of the money that has been invested in a business (net capital divided by capital employed)

Profitability ratios

Gross profit, net profit and ROCE

Liquidity ratios

How much money a business has (Current ratio & Acid test ratio)

Current ratio or Working capital ratio

Current assets divided by current liabilities

Acid test ratio or Liquid capital ratio

Current assets minus stock divided by current liabilities