Commercial intelligence Flashcards
What is gross profit
Revenue, minus direct costs (cost of goods sold)
What is operating profit
Revenue, minus direct costs (COGS) and fixed costs
What is net profit
The final figure after all expenses are deducted (operating costs, COGS, taxes, interest)
What is profit margin
Percentage of profit a company generates from its total revenue
What is gross profit margin
The percentage of revenue that exceeds the direct costs of producing the goods
What is operating profit margin
Represents the percentage of revenue remaining after subtracting COGS and operating expenses
What is net profit margain
The percentage of revenue that remains as profit after all expenses, taxes and interest are deducted
What is the calculation for profit margain
Profit Margain = (Net Profit/Revenue) × 100
Profit Margin = (£10,000/£100,000) × 100 = 10%
What is contribution
How much revenue remains after deducting variable costs
What is break-even
The level of sales needed to cover all fixed costs
What is £:£
Return on marketing or sales investment
What is £:£ useful for
The direct relationship between marketing spend and revenue generation
What is the break-even point calculation
Break-even point (units) = Fixed costs/Price per unit − Variable cost per unit
If a company has fixed costs of £10,000, sells a product at £50 per unit and the variable cost per unit (cost of producing each unit) is £30, the break-even point is calculated as:
Break-even point = £10,000/£50 − £30 = 500 units
What is ROI
Return on investment
What is ROMI
Return on Marketing investment
What is CLV
Customer lifetime value
What is CAC
Customer acquisition cost
What does CBA stand for
Cost-benefit analysis
How is ROMI calculated
ROMI = (Revenue from marketing activities-Marketing spend/Marketing spend) x 100
How is ROI calculated
ROI = (net profit/cost of investment) x100
How is CLV calculated
CLV = Average purchase value x Purchase frequency x Customer lifespan
What is NPV
Net present value
What is CBA (Cost-benefit analysis)) used for
Comparing the costs and benefits of a project
How is CBA calculated
CBA = Total benefits/Total costs