Lesson 14

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

MULTIPLE-CHOICE 1)Mark sells 2 bags of Haribo at school for £1.50 each. He bough the sweets on special offer from ASDA for £1 each. Has he made a profit or loss?

MULTIPLE-CHOICE 2)A business sells 300 ice creams at £1 each in one week. It costs £450 to buy the ice creams from the manufacturer. Profit or loss?

MULTIPLE-CHOICE 3)Sales revenue for a business selling sportswear is at an all time high at £2million for the financial year. However they have incurred costs from a flood at £1million, fixed costs are £200k and insurance premiums have increased to £500 for the year. Has the business made a profit or loss?

MULTIPLE-CHOICE 4)In one day, a bakery sells: 200 doughnuts at £0.50 each It costs them £85 to manufacture the doughnuts and they have to pay the staff at £20 for one day. Have they made a profit or a loss?

MULTIPLE-CHOICE 1)Mark sells 2 bags of Haribo at school for £1.50 each. He bought the sweets on special offer from ASDA for £1 each. Has he made a profit or loss? Profit

MULTIPLE-CHOICE 2)A business sells 300 ice creams at £1 each in one week. It costs £450 to buy the ice creams from the manufacturer. Profit or loss? Loss

MULTIPLE-CHOICE 3)Sales revenue for a business selling sportswear is at an all time high at £2million for the financial year. However they have incurred costs from a flood at £1million, fixed costs are £200k and insurance premiums have increased to £500 for the year. Has the business made a profit or loss? Profit

MULTIPLE-CHOICE 4)In one day, a bakery sells: 200 doughnuts at £0.50 each It costs them £85 to manufacture the doughnuts and they have to pay the staff at £20 for one day. Have they made a profit or a loss? Loss

UNIT TITLE:Unit 2:Finance for Business LESSON TITLE:Profit & Loss Account LEARNING AIM: C 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) Identify the purpose of a profit & loss account (income statement) LO2) To complete a profit & loss account from information provided LO3) To analyse financial statements for a small business and suggest appropriate actions that the business can take to succeed

Competence levelDescriptor Autonomous I can delve deeper into my calculations by fully explaining how my calculations explain the financial state of the business and I will evaluate how effective/ineffective their business activities have been for the organisation and make justified recommendations for improvement. Advanced As below but additionally I can use my calculations to begin to analyse the activities of my focus organisation and recommend strategies for improvement. Strong As below but additionally I can fully explain what the calculations show and explain the financial state of the business. Regular I can correctly input data into a P&L Account, calculate totals and then begin to explain what the calculations show. GuidedThrough basic calculations, I can input data correctly into a P&L Account. I can recognise the layout of the P&L Account, input data correctly and explain what the figures show:

Video Clip iness/finance/accountsvid.shtml

What is a Profit & Loss Account  Often used to take to the Bank Manager when wanting to apply for a loan  Sometimes called the ‘income statement’  Show profit/losses over a one year period

Quick Quiz Which 2 of the following are ways of improving a business’ gross profit? a)Sell the business to a competitor b)Reduce the business’ costs c)Reduce the business’ turnover d)Reduce productivity e)Reduce business efficiency f)Increase productivity

Quick Quiz Which 2 of the following are ways of improving a business’ gross profit? a)Sell the business to a competitor b)Reduce the business’ costs c)Reduce the business’ turnover d)Reduce productivity e)Reduce business efficiency f)Increase productivity

What is a Profit & Loss Account There are 3 sections to the P&L account: -Trading Account -Profit & Loss Account -Appropriation Account

What is a Profit & Loss Account You can see from your revision guide what is included in each section.

Profit & Loss Account Complete task on Sports Warehouse Plc.

Lesson 15

Re-cap on P&L Account a)What is a P&L Account also known as? b)What is a P&L Account? c)What are the 3 section of a P&L Account?

UNIT TITLE:Unit 2:Finance for Business LESSON TITLE:Profit & Loss Account LEARNING AIM: C 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) Identify the purpose of a profit & loss account (income statement) LO2) To complete a profit & loss account from information provided LO3) To analyse financial statements for a small business and suggest appropriate actions that the business can take to succeed

Competence levelDescriptor Autonomous I can delve deeper into my calculations by fully explaining how my calculations explain the financial state of the business and I will evaluate how effective/ineffective their business activities have been for the organisation and make justified recommendations for improvement. Advanced As below but additionally I can use my calculations to begin to analyse the activities of my focus organisation and recommend strategies for improvement. Strong As below but additionally I can fully explain what the calculations show and explain the financial state of the business. Regular I can correctly input data into a P&L Account, calculate totals and then begin to explain what the calculations show. GuidedThrough basic calculations, I can input data correctly into a P&L Account. I can recognise the layout of the P&L Account, input data correctly and explain what the figures show:

TASK 1 Complete Workbook. [30mins]

TASK 2 You have 20mins to revise theory on Balance Sheets and Profit & Loss Account. You will now sit a test! [30mins]

TASK 3 Use the revision guidance notes to produce your own revision notes ready for the exam! [30mins]