Marketing EssentialsSection 2:
Financial Aspects of a Business PlanAfter You Read Online ActionReviewing Key Terms and Concepts - Gross profit or gross margin on sales is the difference between the
net sales and the cost of goods sold. The formula for calculating gross profit
is: Net Sales – Cost of Goods Sold = Gross Profit
- Variable expenses change from one month to the next. Variable costs
can fluctuate up or down depending upon the sales volume of the business. Fixed
expenses are costs that remain the same for a period of time regardless of sales
volume.
- A balance sheet is a summary of a business’ assets, liabilities,
and owner’s equity.
Integrating Academic Skills - Net sales = $308,900 ($315,000 - $6,100); Gross profit = $96,900
($308,900 - $212,000); Net income from operations = $2,400 ($96,000 - $94,500)
- Answers may include prompt invoicing to customers with good credit;
managing payables by making timely, accurate payments, correcting overbilling,
and controlling overhead costs.
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