Money In - Money Out
Money flow within a business is relatively simple process.
“It flows in and it flows out, and hopefully some stays behind”
- Money-flow
- Purchase of stock or materials
- Setting a selling price for products or services
- Mark-up and Maargins
- Sales -V -Income
- Cost of goods sold.
- Gross trading profit
- Gross profit margin
- Operating expenses
- Net profit or loss
- Distributions
- Break-even Point
We are going to explore the different directional flows and create financial health monitors for your business. You need to be able to read and interpret how your business is performing in order to steer a safe course and avoid dangerous waters. At any point in time you need to know if your business is profitable and how you are going to pay your upcoming accounts as well as any pay for any future planned capital requirements.
We use Trading Reports to provide key business indicators. The most common trading reports are the;
- Profit and Loss Account or Income Statement as it is often referred to.
- Balance Sheet
- Cash-flow forecast.
This session focuses on the following business cycle model.
Stages in the Business Cycle
- Purchase goods for resale or Manufacture
- Establish a selling Price
- Sales
- Gross Profit
- Operating Expenses
- Net Profit before Tax
- Distributions
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