Revenue, Costs, Profit and Cash Flashcards
what is the breakeven point?
When total costs=total revenue
what is breakeven per unit?
fixed costs/ contribution per unit
what is the margin of safety?
difference between breakeven and actual output
what is contribution?
Sale price per unit- variable cost per unit
what is insolvency ?
The inability to pay debts
What is liquidity?
the degree to which a business can pay back its debts in a given time period
What is working capital?
the amount of cash (assets) that a business has to repay its debts in a given time period
How can you improve profits?
Reduce COGS, Reduce fixed costs, raise prices, switch from a niche to a mass market
what are sunk costs?
Heavy start up costs that cannot be recovered
what are legal barriers?
Licenses/permits that may be needed to enter a new market
What is gross profit?
revenue- total costs
what is operation profit?
gross profit- fixed costs
what is net profit
How well the shareholder will do
