unit 6.4 quizlet Flashcards
Income statement
An account of the profit and loss over a period of time
Cost of sales
Expenses involved in directly supplying the good or service i.e raw materials
Overheads
Expenses that do not directly generate revenuue i.e stationary
Operating profit equation
Gross profit - overheads
Gross profit equation
revenue - cost of sales
net profit equation
operating profit - tax and interest
gross profit margin equation
Gross profit / revenue x 100
net profit margin equation
Net profit/ revenue x 100
Assets
Something the business owns
Liabilities
something the business owes
Current assets
Something the business will own for less than a year i.e cash
Non current assets (fixed assets)
Something the business will own for longer than a year i.e a vehicle
Current Liabilities
Something the business will repay in less than a year i.e an overdraft
Non current liabilities
Something the business will repay in more than a year i.e a mortgage
Net assets equation
total assets - total liabilities
