Unit 3: Financial management

Cards (14)

profit 
the difference between the revenue of a business and its total cost
revenue 
a measure of the income received from an organisation's activities
profit calculation
profit = revenue - cost
ways of describing revenue
income
total revenue
sales revenue
sales turnover
sales
turnover
increasing profit
increasing sales revenue / lowering costs
total revenue calculation
total revenue = price * quantity
total cost calculation
total cost = fixed cost + variable cost
uses of cost and output
calculates financial implications of changing the level of output
fixed cost 
costs that don't vary directly with output in the short run (rent)
variable cost
costs that vary directly with output in the short run (raw materials)
examples of fixed costs 
rent and rates
salary
administration
vehicles
marketing
lighting and heating
examples of variable costs 
raw materials
wages
breakeven output
the level of output at which total sales revenue is equal to cost of production
how to work out breakeven output
a table
a formula
a graph