On day 20 of the Year 12 Recap we look at some of the basic cash flow concepts of a business – revenue, costs and profits.
Private sector organisations operate to generate a profit for their shareholders. The profit margins of a business describe the accumulated difference between the sales revenue and the cost per unit. The profit performance of a business is important because it provides the organic funds for businesses to invest and expand in the future. By being comfortable with these terms it allows you to evaluate the impact of different pricing strategies on business’s profitability.
Here Jack guides you through the revision slide: