introduction to finance I |
|
Task 1
Finance often puts people off because they 'don't like maths', but actually the calculation undertaken in finance are simple. The most important aspect is learning what the financial terms mean. What do you understand by the following terms:
Finance often puts people off because they 'don't like maths', but actually the calculation undertaken in finance are simple. The most important aspect is learning what the financial terms mean. What do you understand by the following terms:
Information
All businesses use money to make more money, but there are specific names for that money depending on what is happening with it. For example is it money you are receiving or money you are spending?
All businesses use money to make more money, but there are specific names for that money depending on what is happening with it. For example is it money you are receiving or money you are spending?
Key terms
Revenue is the income that a business receives from selling its goods or services. It is also referred to as 'turnover'. It is measured by the number of units sold multiplied by the price.
Costs are outgoings that a business must pay, they are broken down into three different types; fixed costs, variable costs and total costs.
Profit is the money left from a businesses income once it has paid all of its outgoings. Not all businesses make a profit.
Revenue is the income that a business receives from selling its goods or services. It is also referred to as 'turnover'. It is measured by the number of units sold multiplied by the price.
Costs are outgoings that a business must pay, they are broken down into three different types; fixed costs, variable costs and total costs.
Profit is the money left from a businesses income once it has paid all of its outgoings. Not all businesses make a profit.
Task 3
Read the case study and answer all questions to the best of your ability.
Read the case study and answer all questions to the best of your ability.
Case study: ML INC.
In 2017 Mona Lott, a fashion designer, set up her own clothing brand retailing direct to consumers via the internet. In her first year of trading, Mona focused on one item of clothing, t-shirts, which she retailed at £12 each. In her first month of trading ML INC. sold 347 units. |
Questions:
1. What was ML INC.s revenue for the first month of trading? Please show your workings
2. How could Mona increase the revenue of ML INC.?
3. If ML INC.s costs for the first month of trading were £3,000 how much profit did the business make?
Stretch & challenge: What costs do you think ML INC. may have incurred during their first month of trading?
1. What was ML INC.s revenue for the first month of trading? Please show your workings
2. How could Mona increase the revenue of ML INC.?
3. If ML INC.s costs for the first month of trading were £3,000 how much profit did the business make?
Stretch & challenge: What costs do you think ML INC. may have incurred during their first month of trading?