Creado por Charlotte Summerly
hace más de 8 años
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Pregunta | Respuesta |
What is profit and how does it differ from cash? | Cash is physical Profit is long term |
What is profit? | Total revenue - total costs |
Types of profit | Gross profit Operating profit Net profit |
Gross profit | Revenue - variable costs Gross profit refers to profit made after fixed/direct costs are met |
Operating profit | gross profit - overheads |
Net profit | operating profit - interest and exceptional costs Net profit could be calculated before and after subtraction of taxes |
What is profit and loss account? | - aka statement of comprehensive income - financial performance of past 12 months - seen in business plan - comparisons can be made |
Profit and loss account and cash flow forecast | The difference between this and a CFF is simply the detail in document for instance tax is often considered and profits are calculated |
Why is it a good idea to calculate profit/loss? | - shows financial health - avoid failure - record of incomes - compare trades - legal requirement - LTD are required to publish this account - can look at how to generate higher profits |
Calculate profit and loss accounts | Percentage changes in profit = (current years profit - previous years profit / previous years profit) x 100 |
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