BUSINESS U2: ch34: profits

profit

total costs - total revenue or total contribution - total fixed costs

statement of comprehensive income (profit and loss)

a financial statement that shows the income and expenditure (costs) of a business over a financial year

revenue

price x quantity

cost of sales

variable cost per item x quantity

order of the statement of comprehensive income

revenue, cost of sales, gross profit, operating expenses, operating proft, finance costs, profit of the year, taxation, profit of year after tax

gross profit

revenue - cost of sales

operating profit

gross profit - operating expenses

profit for year

operating profit - finance costs

profit of the year after tax

profit for year - tax

improving profits

-marketing strategy: use new distribution channels, improve targeting, accept a wider range of payments, try a new campaign (loyalty cards)

-new markets: try sell in new areas, expand internationally

-diversify: try and introduce new products, get into new markets like mens clothing

-stop unprofitable activities: remove poor performing products/services

gross profit margin

Gross profit/sales revenue x 100

operating profit margin

Operating profit / sales revenue x 100

profit for the year margin

Profit for the year / sales revenue x 100