1) Gross revenue a) Costs that change depending on output. If you print 1000 books, you have to pay more than for 10 prints b) If you sell books, but you also made money by renting space in your bookshop to a coffee vendor, that's.... c) The amount of money you make from selling something, without any of the costs removed. d) Take gross revenue. Removed fixed and variable costs, and you get "net operating income". Then remove "other income" and interest expense. what do you get? 2) Fixed expense a) The amount of money you make from selling something, without any of the costs removed. b) Money you pay out every month: rent, bills, insurance... whether you sell 1000 books or 1 book. c) Take gross revenue. Removed fixed and variable costs, and you get "net operating income". Then remove "other income" and interest expense. That's net Income! d) This number shows how much profit you make for every dollar you spent, before paying any interest expenses or tax. 3) Variable expense a) Costs that change depending on output. If you print 1000 books, you have to pay more than if you order 10 prints. b) Sell 1000 books and put the money in your piggy bank. Now remove rent, internet and electricity costs (fixed). Next, remove the money you paid to print the books (variable). Net operating income is what's left! c) I know, I know, it's a variable cost...but it sits on its own. If you borrowed money, you have an interest expense to pay! d) Money you pay out every month: rent, bills, insurance... whether you sell 1000 books or 1 book. 4) Net Operating income a) Sell 1000 books and put the money in your piggy bank. Now remove rent, internet and electricity costs (fixed). Next, remove the money you paid to print the books (variable). What's left? b) This number shows how much profit you make for every dollar you spent, before paying any interest expenses or tax. c) The amount of money you make from selling something, without any of the costs removed. d) If you sell books, but you also made money by renting space in your bookshop to a coffee vendor, that's other income. 5) Interest expense a) If you sell books, but you also made money by renting space in your bookshop to a coffee vendor, that's other income. b) Take gross revenue. Removed fixed and variable costs, and you get "net operating income". Then remove "other income" and interest expense. You now have Net Income! c) This number shows how much profit you make for every dollar you spent, before paying any interest expenses or tax. d) It's a variable cost...but it sits on its own. If you borrowed money, you have to pay it! 6) Other income a) The amount of money you make from selling something, without any of the costs removed. b) Costs that change depending on how much you produce. c) If you sell books, but you also made money by renting space in your bookshop to a coffee vendor, that's called... d) It's a variable cost...but it sits on its own. If you borrowed money, you have to pay it! 7) Net income a) Take gross revenue. Removed fixed and variable costs, and you get "net operating income". Then remove "other income" and interest expense. What do you get? b) This number shows how much profit you make for every dollar you spent, before paying any interest expenses or tax. c) If you sell books, but you also made money by renting space in your bookshop to a coffee vendor, that's other income. d) Sell 1000 books and put the money in your piggy bank. Now remove rent, internet and electricity costs (fixed). Next, remove the money you paid to print the books (variable). Net operating income is what's left! 8) Operating Profit Margin a) Sell 1000 books and put the money in your piggy bank. Now remove rent, internet and electricity costs (fixed). Next, remove the money you paid to print the books (variable). Net operating income is what's left! b) The amount of money you make from selling something, without any of the costs removed. c) This number shows how much profit you make for every dollar you spent, before paying any interest expenses or tax. d) Costs that change depending on production levels

Win or Lose! Financial management jargon 1 (ROI du Pont sheet)

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