Business studies formula Flashcards
Revenue definition
The amount of income a business will earn over a period of time
profit definition
the amount of money left after paying costs over a period of time (profit or loss is the difference between revenue and costs over a period of time
Formula for revenue
Total revenue= price of one item x quantity
Profit formula
Revenue- total costs
cash flow
the money that flows in and out of a business (NOT PROFIT)
Total expenditure formula
opening balance- closing balance
net cash flow formula
cash inflow - cash out flow
net cash flow def
the difference between cash inflow and cash outflow over a period of time. Your final figure.
opening balance definition
the money you have at the beginning of the month (bank balance at start)
opening balance formula
closing balance - net cash flow
closing balance definition
the money you have at the end of the month the money you have at the beginning of the month (bank balance at end)
closing balance formula
opening balance + net cash flow
break even
How many sales you would need to make to get to the point where:
total costs = revenue
cash inflow def
Money flowing into a business (e.g. sales, extra money makers like renting space out to ppl etc)
cash inflow formula
net cash flow + cash outflow
