Business

What is a proforma?

An estimate/projection of future revenues, expenses, net income, and capital needed to fund the company’s operations. 

What is the Profit Motive?

 Its the driver that leads to risk-taking and the creation of economic value through innovation. The incentive in a private enterprise system for people to risk capital to start a business in order to earn a profit in return.

Does the profit motive lead to greed gone wild?

Companies that have solely focused on profit have gone out of business. So yes.

What was the Great Recession?

In 2008, the U.S. Economy began to unravel, and the financial meltdown immediately became a global economic crisis. A moment when the mortgage and the housing sector collapsed due to increasing interest rates leading to a worldwide economic crisis

Should companies only pursue profit?

If left unchecked and unregulated, the profit motive can lead to company failure, job losses, and economic downturns.

What are some benefits of the profit motive?

Profit motive has also been the source of some of the world's greatest innovations. it helped fuel many inventions and economic growth during the industrial-technological and digital revolutions

What profit is, and how it is calculated?

Profit means the financial gained earned when the revenue generated from a business exceeds all the expenses associated with achieving that revenue over a certain time period..

What is a P&L?

Reports revenues expenses and income or loss for a specific time period

What is Cost of Goods Sold?

The cost a company pays for the goods it sells. It includes the cost of the raw materials along with the direct labor and manufacturing costs used to produce the goods.

What is Gross Profit?

calculated as revenue minus cost of goods sold.

What are Operating Expenses?

these are expenses directly associated with operating a business.

What is Operating Income?

Gross Profit minus your Operating Expenses equals Operating Income

What is Net Income?

Gross Profit minus all Expenses, also called Net Profit, and often referred to as a company's "bottom line".

What about taxes?

Depending on the business type, for example, a corporation or an LLC, there might be one more expense… taxes. But for now we will assume Serena’s Candles is an LLC, which stands for Limited Liability Company, where all tax burdens fall or “pass-through” to the individual owners