Breaking Even, Cash Flow, Liquidity Flashcards
What is a break-even output meaning :
When revenue and total cost are the same meaning neither a profit or losss
What is a fixed cost
A business expense that does not change ( constant )
Break even output (equation)
Fixed cost / contribution per unit
Net cash flow (equaution)
Cash inflow - cash outflow
Gross profit margin (equation) =
(Gross profit / revenue) X 100
What is gross profit
the profit a business makes after subtracting all the costs that are related to manufacturing and selling its products or services.
What is revenue
The total amount of income generated by the sale of goods
Mark up meaning
An increase in price
Mark up equation
(Gross profit / cost ) x100
Mark up equation
(Gross profit / cost ) x100
Profit margin ( the amount by which revenue exceeds costs ) equation
(Profit / revenue )x100
What is capital
The money used to build, run or grow a business
Return on capital meaning and equation
measured a company’s net income relative to the sum of its debt
(Profit/ capital employed) x100
Capital employed meaning
The total amount of capital invested in a business for the purpose of generating profits
