Annual Report Progress report available to all investors (or potential investors); Contains all financial performance for the past fiscal year; SEC Format: 10K
Fiscal Year A period used for calculating annual ("yearly") financial statements. Calendar used in business; For most companies: First day...
FM116 Sales & Profit + Chapters 1, 2, 6,
& 7 Questions and Correct Answers
Annual Report ✅Progress report available to all investors (or potential investors);
Contains all financial performance for the past fiscal year; SEC Format: 10K
Fiscal Year ✅A period used for calculating annual ("yearly") financial statements.
Calendar used in business; For most companies:
First day = approx. February 1
Last day = approx. January 31 (of the following year)
Gross ✅Refers to the total amount before anything is deducted.
Net ✅Refers to the amount remaining after certain adjustments have been made for
expenses, deductions, debts, etc.
Income Statement ✅A financial statement that measures a company's income over a
specific accounting period. Is assessed by giving a summary of how the business
generates revenue and what expenses are. "Report card on company's financial
performance"
-Also known as "profit & loss statement
-Also called "statement of earnings"
Gross Profit ✅= Net sales - COGS
Net Profit ✅= Gross profit - operating expenses
Sales and Revenue ✅Mean the same thing
Net Sales ✅All the money that came into the company from customers during the
whole year (after customer returns)
Net Sales Profit Margin ✅= (this years sales-last years sales)/last years sales x 100
Benchmarking ✅Process of comparing one's business process and performance
metrics to industry best or best practices from other compares.
Mark-up ✅The amount added by a seller to the cost of a product or service to cover
expenses and make a profit.
-The difference between the cost price and the selling price; expressed as a # price or
%.
, Gross Margin ✅= (revenue - COGS)/revenue
Net Profit ✅The money that is left after the company has paid for and sold its
merchandise, and has also paid all the "bills" necessary to run the business.
-Also called "bottom line;" last line of income statement.
Profit Margin Ratio ✅A profitability ratio that measures the amount of net income
earned with each dollar of sales generated by comparing.
Profit Margin ✅Measures what percentage of sales is made up of net income;
expressed as a %.
Profit Margin/Net Profit Penetration ✅= net income/revenue x 100
Business ✅Organization or activity that provides goods and services in an effort to
earn a profit.
Sales/Revenue ✅Money coming into a company.
Expenses ✅Bills companies have to pay in order to operate.
Earnings ✅Money companies can put in the bank at the end of the year. Sales minus
expenses.
-Also called "Income" or "Profit"
Value ✅Relationship between price of a good or service and the benefit it has to offer
its customers.
Loss ✅When expenses are greater than sales/revenue.
In the red ✅Phrase that means you are operating at a loss; negative = loss.
Nonprofit Organization ✅Business-like establishments that employ people and
produce goods and services.
-Aim to contribute to the community rather than generating financial gain
USP ✅Unique Selling Proposition; "what is different about you?"
Standard of Living ✅Quality and quantity of goods and services available to a
population.
Quality of Life ✅Overall sense of well-being experienced by an individual or group.
Consumer ✅Buys goods for their own personal consumption.
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