Statement of Comprehensive income Flashcards
What is a statement of comprehensive income?
This shows the trading position of the business which is used to calculate gross profit. It then takes into account all other expenses to calculate the profit or loss for the year
What is gross profit?
The profit a business makes after subtracting all costs that are related to manufacturing and selling its products or services
Formula: Revenue- cost of sales
What is revenue?
Total income of money from sales not including costs
Formula= price x quantity sold
What is cost of goods sold?
This is the actual value of inventory used to generate sales
Formula: opening inventories+ purchases-closing inventories
What is operating profit
Gross profit minus operating expenses
What is profit for the year
Net profit- tax
What is dividends?
Sum of money paid regularly (typically annually) by a company to its shareholders out of its profits
What is retained earnings?
Retained Earnings (profit) the profit left after all deductions, including dividends, have been made, this is “ploughed back” into the company as a source of finance.
What is net profit?
NET PROFIT = Gross profit – expenditure
