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

Re-cap What is the difference between start-up and operating costs? What are fixed costs? Example? What are variable costs? Example? What is revenue? How do you calculate revenue? Define the term ‘profit’. = 5mins

LO1) To define the term expenditure UNIT TITLE: Unit 2:Finance for Business LESSON TITLE: Expenditure/Overheads 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 define the term expenditure LO2) To list different examples of business expenditure LO3) To analyse the importance of profit for a business

Discuss… Reflect on the below saying: “You have to speculate to accumulate”.

Expenditure Businesses have to spend money to keep it going and to succeed Cash spent to generate sales i.e. buying stock Types of expenditure might be : - Staff wages - Stock - Fuel for delivery vans - Heating/lighting - Loan repayments - Advertising/marketing - Telephone bills

Overheads Overheads = type of expenditure that is not directly related to making/producing products. For example: Rent Legal fees Insurance

Task 1 Which are the following are overheads? Why? Income Cash sales Wages Utilities Interest earned Tax rebate

Task 2 Complete BA Case Study P.g. 62