Business Theme 2: Managing Finance- Profit

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Profit
Statement of comprehensive income
Sales revenue
Cost of sales
Operating profit
Operating profit margin
Profit for the year (Net profit)
Gross profit margin
Profit for the year margin
Cash
Cash flow
Liquidity

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Costs directly linked to the production of goods and services
= (gross profit / sales revenue) x 100
Physical existence of money within the business
The timing of cash flowing in and out of the business
= Gross profit - expenses
A measure of the extent to which a person or organisation has cash to meet immediate and short-term obligations
= operating profit - interest and taxation
= (profit for the year / sales revenue) X 100
= Total sales revenue - cost of sales
= Quantity sold x selling price
= (Operating profit / sales revenue) x 100
a formal financial document that summarises a business' trading activities and expenses to show whether it has made a profit or loss