2.4 - financial decisions Flashcards
(13 cards)
what is gross profit?
the amount of money made after direct costs of making / selling products or services
what is business investment?
business investment is money used to buy an asset expected to generate return of income / profit
what are ways that a business can reinvest?
land - expand your land to produce more goods
machinery - efficiency
vehicles - reliable transport
what is average rate of return?
quantitative method to decide if an investment is worth it
what is the average rate of return calculation?
average annual profit / investment cost x 100
what is net profit?
it is profit made after other operating expenses and interest is paid
how do you work out gross profit margin?
gross profit / revenue x 100
how do you work out net profit margin?
net profit / revenue x 100
how do businesses understand business performance?
quantitative data to understand performance and the operating market
what are types of business info / data you can get?
marketing data, market data, market share
what is marketing data?
internal data on sales figures, marketing spend and primary market research
what is market data?
secondary data for the industry about decline
what is market share?
the percentage of total market owned by a particular business
