Lesson Objectives All students will understand Most students will How to define and calculate profit or loss Most students will Apply these calculations to a context Some students will Understand the ways in which businesses try to increase profit Progress Arrow

Profit or loss Keeping track of the finances is essential for assessing business performance and for tax purpose. An important part of company accounts is the “Statement of comprehensive income” also called “profit and loss account”. It starts with a figure for sales revenue and deducts each different group of costs to arrive at a measurement of profit

Calculating profit or loss Read case study pg 108 Now lets look at Figure 21.2 pg 110 Work through example and put key terms into notes

Task “show your understanding” pg 111

Profit Margin By calculating profit ratios we can make better comparisons about a business performance, these are expressed in % Gross profit margin = (Gross profit x100)/sales revenue Operating profit margin = (Op profit x100)/sales revenue Net profit margin = (Net profit x100)/sales revenue

Task “try this” pg 112

Methods for improving profits Reduce COGS Reduce overheads Increase sales revenue by increasing prices Increase marketing Reduce prices to increase sales volume Consider the “however” with each of these methods?

Task Exam style questions 2&4 pg 113