Keywords 3 Flashcards
(17 cards)
Net Profit Margin
It shows how efficiently a business controls its expenses. It shows how well it manages its expenses
Net profit margin formula
Net profit/sales revenue x100
Cost of sales
Cost of sales are the direct costs related to the supply of a product or service.
Leasing
Leasing is where a business pays for the use of an asset but will never own the asset improving short term cash flow compared to buying the asset outright.
Trade Credit
When a business buys raw materials, components, services or other goods from another business but agrees to pay for tbose at a later scheduled date.
Income statement
An income statement shows the businesses financial performance over a given time period. it shows gross profit and net profit.
Adverse variance
When the actual figure will lead to less overall profit being made than was budgeted. This could either be because the actual costs were higher than budgeted or the revenues were lower than budgeted.
Favourable Variance
When the actual figure will lead to more overall profit being made than was budgeted. This could be because actual costs were lower than budgeted.
Budgets
A budget is a financial plan for the future aimed at controlling expenditure and/or revenues.
Multi-channel distribution
A combination of distribution channels are used to get the product from manufacturer to consumer. For example selling to retailers and selling online.
Below the line promotion
strategies used to target consumers more directly such as personal selling, packaging, direct mail
Price skimming
Charging a high price to make max profits on each item sold for a limited period of time. It is suitable when the product is price inelastic in the short term.
Price penetration
charging a low price to penetrate the market. This may be used to enter the market where there is much competition and price is elastic
Product lifecycle
Represents the stages that a product goes through from the intial development and introduction to growth, maturity, saturation and decline. it measures sales overtime.
Asset led marketing
Based on firms own strengths, not solely on the customers needs. This could include protection techniques and distribution network, branding, experience and image
Differetiation
Distinguishing a product or service from others. By making a product different or appearing different from similar products sold by rivals, a business will hope to attract more customers
Digital Media
Refers to information that is broadcast through the screen, This includes text, audio, video and graphics that is transmitted over the internet, for viewing on the internet
