That Blue Square Thing

BTEC First Business - Unit 2 - Finance

Profits and Income Statements

Learning Aim C1: Understand how businesses measure success

Businesses need to know whether they are doing OK. Are they making enough money? Are their costs under control? Do they have the right assets to move forward? Knowing how to measure success effectively is important.

You need to know about:

Making a profit

Make sure you know the key definitions. It gets a little tricky here - lots of similar terms meaning slightly different things. Precision is everything.

PDF iconCost of Sales, Gross Profit and Net profit - slides, including definitions and formulae

Note that you need to know these formulae in an exam. They will not be provided for you.

Using financial statements

Financial statements are essential documents for businesses to keep. They need to up to date and easy to use.

A range of people involved in a business might want to check financial documentation. These might include:

PDF iconIncome statements - slides on how they work and what makes them up. Sometimes called a trading account

PDF iconSummary questions - dealing with a range of formula, including some from the Costs and Revenue unit!

PDF iconBalance sheets - now the developed version

PDF iconBalance sheet - with notes to explain each element

PDF iconExample balance sheet - which can be filled in for practise

The BBC Bitesize site has some notes on financial records and why they're important, including most of the key formulae and charts. There are notes, some test questions and a nice video with a certain well known businessman telling you simple maths is important...