Topics Covered Business Costs Revenue Profit Expenditure Break Even Analysis Budgeting Cash Flow Forecast Profit & Loss Balance Sheet Maximising Profits.

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Topics Covered Business Costs Revenue Profit Expenditure Break Even Analysis Budgeting Cash Flow Forecast Profit & Loss Balance Sheet Maximising Profits

Stand up/Sit down Stand up if you think the business made a profit. Sit down if you think the business made a loss. = 5mins

Stand up/Sit down An ice-cream van sells 50 ice- creams for £1 each. However, it costs him 50p each to buy them from the supplier. = 5mins

Stand up/Sit down Charlie is a mobile hairdresser, he makes £110 per day cutting people’s hair, it costs him £150 per day in petrol to get to each house. = 5mins

Stand up/Sit down Steve made £1000 today by doing MOTs. The parts needed cost him £70 altogether. = 5mins

So…what is profit? Profit is.... = 5mins

UNIT TITLE:Unit 2:Finance for Business LESSON TITLE:Profit LEARNING AIM: B COMPETENCY FOCUS: Key Skills (L5): you will be able to develop your numeracy skills to calculate financial transactions of a business and to interpret financial data. Learning Objectives By the end of the lesson, you should be able to… LO1) To calculate gross profit and net profit using the correct formulae (Gui-Reg) LO2) To explain what the terms gross profit and net profit mean for a business organisation (Reg-Str) LO3) To analyse the importance of profit for a business (Adv)

Profit Profit = the money left over from revenue after all costs have been deducted. Profit = Revenue – Total Costs This is sometimes called ‘Gross Profit’.

Net Profit Net profit is the money left over after all general operating costs have been deducted. Net Profit = Gross Profit – Operating Costs

How can the business maximise profit? To survive, the business needed to make as much money as possible (profit maximisation). It can do this by: Increasing sales income (selling more products) Reducing their costs

Task 1 Profit or Loss? php?option=com_content&view=article&id=35&Ite mid=23

Task 2 Simple profit calculations: 1)For the year ended 30 September 2009, Brooks Builders received £210,000 in revenue, had fixed costs of £70,000 and variable costs of £95,000. How much profit did they make? 2)Last week, Peter’s ice-cream business sold 5,000 items at £1.20 each. He had to pay £1,200 for the stock, £70 for fuel, £30 in wages, £10 insurance and £35 site fee. How much profit did he make?

Task 3 Complete worksheet.

Task 3 Test