Cash Slow And Profit Flashcards
(10 cards)
what is cash flow
The movement of cash into and out of a business to pay bills
What is profit
Measures the extent to how much revenue is exceeding costs to produce it
What is gross profit
Income received from sales minus the cost of goods and services sold
What is operating profit
Financial surplus arising from a businesses normal trading activities before and after tax
What is profit for the year
A measure of the businesses profits that takes into account external incomes
What are direct costs
Cost of sales and raw materials
What are indirect costs
Relates to all aspects of the businesses activities wages and maintenance cost
How to calculate gross profit
Revenue- direct costs
How to calculate operating profit
Gross profit- indirect cost
How to calculate profit for the year
Operating profit- taxation and interest on loans
