1. Unit 3: Financial Forecasting For Business P2: Identify the different sources of revenue

2. Learning objective/intention P2: Identify the different sources of revenue To know the three sources of revenue for a business. To be able to calculate and give examples of Sales income To be able to calculate and give examples of Rental income To be able to calculate and give examples of Interest income To be able to calculate total income

3. Income from Sales The most common way for a business to generate income. Defined as the total money earned from goods and services in a period of time. BP: Primary sector = raw product Ford: Secondary sector = manufacturing Barclays: Tertiary sector = services

4. Income from Sales 2 Calculate the following Bags sold for £20.00 10 per day = 100 per week = 500 per month = 200 per month for 12 months

5. Revenue from Rent/Leasing A popular method of generating extra revenue. Businesses rent out excess capacity. http://www.westking.ac.uk/home/venues-for-hire/ Short term Long term Factor in depreciation of goods!

6. Revenue from Rent/Leasing 2 Calculate the following Van rented for £10 ph for 6 hours = £50.00 per day, 3 days a month = £45.00 per day 25 days in a year. =

7. Revenue from Interest You need to be aware of the impact that interest rates can have on you and your business Current interest rate = less than 1% = Really bad for savers If was 3% £50,000 would make £1500.00 pa Banks offer higher rate for fixed term. examples

8. Calculating total income Value of total sales + Value of total interest + Value of total rental + = total income Sales £20,000.00 Leasing £750.00 Interest £350.00 Add for 1 month, 6 months and a year