1. 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
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2. 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

3. 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

4. Task
“show your understanding” pg 111

5. 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

6. Task
“try this” pg 112

7. 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?

8. Task
Exam style questions 2&4 pg 113