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Lesson 14

Lesson 14. Topics Covered. Business Costs Revenue Profit Expenditure Break Even Analysis Budgeting Cash Flow Forecast Profit & Loss Account Balance Sheet Maximising Profits. MULTIPLE-CHOICE.

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Lesson 14

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  1. Lesson 14

  2. Topics Covered • Business Costs • Revenue • Profit • Expenditure • Break Even Analysis • Budgeting • Cash Flow Forecast • Profit & Loss Account • Balance Sheet • Maximising Profits

  3. MULTIPLE-CHOICE 1) Mark sells 2 bags of Haribo at school for £1.50 each. He bough the sweets on special offer from ASDA for £1 each. Has he made a profit or loss?

  4. MULTIPLE-CHOICE • A business sells 300 ice creams at £1 each in one week. It costs £450 to buy the ice creams from the manufacturer. Profit or loss?

  5. MULTIPLE-CHOICE 3) Sales revenue for a business selling sportswear is at an all time high at £2million for the financial year. However they have incurred costs from a flood at £1million, fixed costs are £200k and insurance premiums have increased to £500 for the year. Has the business made a profit or loss?

  6. MULTIPLE-CHOICE • In one day, a bakery sells: 200 doughnuts at £0.50 each It costs them £85 to manufacture the doughnuts and they have to pay the staff at £20 for one day. Have they made a profit or a loss?

  7. MULTIPLE-CHOICE 1) Mark sells 2 bags of Haribo at school for £1.50 each. He bought the sweets on special offer from ASDA for £1 each. Has he made a profit or loss? Profit

  8. MULTIPLE-CHOICE • A business sells 300 ice creams at £1 each in one week. It costs £450 to buy the ice creams from the manufacturer. Profit or loss? Loss

  9. MULTIPLE-CHOICE 3) Sales revenue for a business selling sportswear is at an all time high at £2million for the financial year. However they have incurred costs from a flood at £1million, fixed costs are £200k and insurance premiums have increased to £500 for the year. Has the business made a profit or loss? Profit

  10. MULTIPLE-CHOICE • In one day, a bakery sells: 200 doughnuts at £0.50 each It costs them £85 to manufacture the doughnuts and they have to pay the staff at £20 for one day. Have they made a profit or a loss? Loss

  11. UNIT TITLE:Unit 2:Finance for Business LESSON TITLE:Profit & Loss Account LEARNING AIM: C COMPETENCY FOCUS: Key Skills (L5): you will be able to develop your numeracy skills to calculate financial transactions of a business and to interpret financial data. Learning Objectives By the end of the lesson, you should be able to… LO1) Identify the purpose of a profit & loss account (income statement) LO2) To complete a profit & loss account from information provided LO3) To analyse financial statements for a small business and suggest appropriate actions that the business can take to succeed

  12. I can recognise the layout of the P&L Account, input data correctly and explain what the figures show:

  13. Video Clip http://www.bbc.co.uk/schools/gcsebitesize/business/finance/accountsvid.shtml

  14. What is a Profit & Loss Account • Often used to take to the Bank Manager when wanting to apply for a loan • Sometimes called the ‘income statement’ • Show profit/losses over a one year period

  15. Quick Quiz Which 2 of the following are ways of improving a business’ gross profit? • Sell the business to a competitor • Reduce the business’ costs • Reduce the business’ turnover • Reduce productivity • Reduce business efficiency • Increase productivity

  16. Quick Quiz Which 2 of the following are ways of improving a business’ gross profit? • Sell the business to a competitor • Reduce the business’ costs • Reduce the business’ turnover • Reduce productivity • Reduce business efficiency • Increase productivity

  17. What is a Profit & Loss Account There are 3 sections to the P&L account: • Trading Account • Profit & Loss Account • Appropriation Account

  18. What is a Profit & Loss Account You can see from your revision guide what is included in each section.

  19. Profit & Loss Account Complete task on Sports Warehouse Plc.

  20. Lesson 15

  21. Re-cap on P&L Account • What is a P&L Account also known as? • What is a P&L Account? • What are the 3 section of a P&L Account?

  22. UNIT TITLE:Unit 2:Finance for Business LESSON TITLE:Profit & Loss Account LEARNING AIM: C COMPETENCY FOCUS: Key Skills (L5): you will be able to develop your numeracy skills to calculate financial transactions of a business and to interpret financial data. Learning Objectives By the end of the lesson, you should be able to… LO1) Identify the purpose of a profit & loss account (income statement) LO2) To complete a profit & loss account from information provided LO3) To analyse financial statements for a small business and suggest appropriate actions that the business can take to succeed

  23. I can recognise the layout of the P&L Account, input data correctly and explain what the figures show:

  24. TASK 1 Complete Workbook. [30mins]

  25. TASK 2 You have 20mins to revise theory on Balance Sheets and Profit & Loss Account. You will now sit a test! [30mins]

  26. TASK 3 Use the revision guidance notes to produce your own revision notes ready for the exam! [30mins]

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