unit 2 - LO3: financial concepts & calculations |
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Definition: A business is an organisation that uses money to make more money!
Recap: 'Uses money' refer to the money invested in a business. Usually from one or more of the following sources:
Personal savings
Bank loan Credit card Loan from friends or family |
Prince’s Trust loan
Grants Credit agreements Business Angels |
Overdrafts
Crowdfunding Trade credit |
Key terms
Sales revenue is the money made buy a business from the sale of goods or services.
Sales revenue = Price per unit X Number of units sold
Profit is the money remaining after costs have been taken away from sales revenue. There are two types of profit, gross profit and net profit
Sales revenue is the money made buy a business from the sale of goods or services.
Sales revenue = Price per unit X Number of units sold
Profit is the money remaining after costs have been taken away from sales revenue. There are two types of profit, gross profit and net profit
Checkpoint 1
Learning Objective: I can explain the purpose of business and why this is important for finance
Learning Objective: I can explain the purpose of business and why this is important for finance
Task 2
Read the vase studies below and calculate the Sales Revenue
Top tip: Write the formula in words first, then write the numbers below the words.
Read the vase studies below and calculate the Sales Revenue
Top tip: Write the formula in words first, then write the numbers below the words.
1. The smoothie stand on Braintree market sells 20 drinks per hour charging customers £2 per drink.
2. Sales of bags at Hollister in Freeport vary in price. The average price for a bag in £50 with ten bags being sold on a typical day
Stretch & challenge: For a charity football match Braintree Town FC expects to sell 500 tickets. The bill for staff for the game will be £1000 and the price per ticket is £5
2. Sales of bags at Hollister in Freeport vary in price. The average price for a bag in £50 with ten bags being sold on a typical day
Stretch & challenge: For a charity football match Braintree Town FC expects to sell 500 tickets. The bill for staff for the game will be £1000 and the price per ticket is £5
Checkpoint 2
Learning Objective :I have accurately calculated sales revenue for a given business
Learning Objective :I have accurately calculated sales revenue for a given business
Key terms
Gross profit is the money left over once you have deducted the cost of sales (opening stock and purchases) from sales revenue
Gross profit = Sales revenue - Cost of sales
Net profit, or true profit, is the money left over once you have deducted all cost (cost of sales and expenses) from sales revenue
Net profit = Gross profit - expenses
Cost of sales includes opening stock and Purchases
Expenses includes rent, wages, salaries, business rates, insurance
Gross profit is the money left over once you have deducted the cost of sales (opening stock and purchases) from sales revenue
Gross profit = Sales revenue - Cost of sales
Net profit, or true profit, is the money left over once you have deducted all cost (cost of sales and expenses) from sales revenue
Net profit = Gross profit - expenses
Cost of sales includes opening stock and Purchases
Expenses includes rent, wages, salaries, business rates, insurance
WWW.SANDONBIZ.WEEBLY.COM
Top tip: Remember to look at each number given in the case study and work out if it is money going in or out of the business
Checkpoint 3
Learning Objective : I have accurately calculated gross and net profit for a given business
Learning Objective : I have accurately calculated gross and net profit for a given business