finance
revenue
the value of goods and services sold by a business
cost of sales
costs that are directly linked to the production of a good or service
expenses
general costs that most businesses incur
net financing costs (equation)
interest paid- interest recieved
taxation
moeny given to the government to spend on public services
budgeting
a form of financial planning to set financial targets
variance
the difference between a budgeted figure and an actual figure
adverse variance
variance that damages a businesses profit
favourable variance
variance that improves a businesses profit
zero based budgeting
when budgeting is started from scratch
what is profitability
the extent to which business activity yield profit
what is investment
money spent by a business on an asset in hopes of making a profit from its use
what is return on investment
the extent to which an investment leads to additional profit
return on investment equation
additional profit / value of investment x100
output
the quantity of goods or services a business produces
cpu
selling price - variable cost per unit
total contribution
total revenue - total variable costs or cpu x output
break even point
when total costs equals totaal revenue
margin of safety
the difference between the level of output and the break even level