Appendix B- Marketing Arithmetic

Appendix B- Marketing Arithmetic - Appendix B- Marketing...

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Appendix B- Marketing Arithmetic Monday, February 21, 2011 3:53 PM 1. Operating statement: a simple summary of the financial results of a company's operations over a specified period of time 1.a. Main purpose of the operating statement is determining the net profit figure and presenting data to support that figure 1.b. Aka: profit and loss statement 1.a. Basic components 1.a.i. Sales: come from the sale of goods and services 1.a.i. Costs: come from the producing and selling process 1.a.i. Balance (profit or loss): the difference between sales and costs 1.a. No one time period that a statement covers; instead, they are prepared to satisfy the needs of a particular business 1.a. By comparing results from multiple operating statements, managers can uncover unfavorable trends in the sales, costs, or profit areas of the business and take any needed action 1. Sales 1.a. Gross sales: total amount charged to all customers during some time period 1.a. Return: occurs when a customer sends back purchased products 1.a. Allowance: usually occurs when a customer is not satisfied with a purchase for some reason; the company gives a price reduction on the original invoice, but the customer keeps the goods and services 1.a. Net sales: the actual sales dollars the company receives 1.a.i. All reductions, refunds, cancellations, returns and allowances are deducted from the original total (gross sales) to get net sales 1. Cost of Sales (CGS) 1.a. The total value (at cost) of the sales during the period 1.a. Purchase discount: a reduction of the original invoice amount for some business reason 1.a. Can be greatly affected by the way inventory is calculated 1. Gross Margin and Expenses 1.a. Gross margin (gross profit): the money left to cover the expenses of selling the
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This note was uploaded on 03/05/2012 for the course BUSI 406 taught by Professor Perreault during the Fall '11 term at UNC.

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Appendix B- Marketing Arithmetic - Appendix B- Marketing...

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