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2.3 Managing finance - Coggle Diagram
2.3 Managing finance
2.3.1 Statement of comprehensive income (profit/ loss account)
Change in sales revenue, direct costs of sales
Profitability
Unusual income/ expenses
operating costs (overheads)
Calculations
Gross profit margin = gross profit/ revenue x 100
Operating profit margin = operating profit/ revenue x 100
Net profit/ revenue x 100
Improving profitability
Raising prices
Reducing variable costs
Reducing other expenses
Reducing on/off costs/ interest charges
Cash v profit
Cash: Inflow/ profit
Profit: Revenue - TC
2.3.2 Liquidity
Statement of financial position (balance sheet)
records assets & liability of a business
Includes
Non current assets (long term)
Current assets:: can b converted into cash
Current liabilities (due within a year)
Non current labilities: x require paying back after a year
Net profits