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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= (gross profit / sales revenue) x 100

= (Operating profit / sales revenue) x 100

= Total sales revenue - cost of sales

The timing of cash flowing in and out of the business

Costs directly linked to the production of goods and services

a formal financial document that summarises a business' trading activities and expenses to show whether it has made a profit or loss

= (profit for the year / sales revenue) X 100

= Gross profit - expenses

= Quantity sold x selling price

= operating profit - interest and taxation

A measure of the extent to which a person or organisation has cash to meet immediate and short-term obligations

Physical existence of money within the business


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