Finance - Income Statements

Question 1

What is the purpose of an income statement ?

Answer 1

An income statement shows how much profit or loss a business has made over a period of time (usually one year)
It is used as a decision-making tool to help managers take action to solve any problems.
An LTD makes a copy of its income statement available to the public each year

Question 2

what is the gross profit calculations ?

Answer 2

Sales income - cost of sales

Question 3

What is the profit for the year calculations ?

Answer 3

Gross Profit less expenses

Question 4

What are ways to increase sales ?

Answer 4

● Increased advertising
● Short-term promotions eg. BOGOF
● Increase price

Question 5

What are wage to reduce costs ?

Answer 5

● Find a cheaper supplier of stock
● Reduce the number of employees
● Reduce the number of hours worked by employees (eg overtime)
● Find a cheaper supplier of utilities
● Buy stock in bulk to receive discounts