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Business Studies

Chapter 9 Financial Information & Decision Making

TermDefinition
ROCE Return on Capital Employed Return On Capital Employed ROCE=Net Profit*100/Capital Employed This is a calculation of how much net profit a business makes as a percentage of the amount of money used.
Gross Profit Margin This shows how much gross profit is made for each $1 of sales. Gross Profit Margin= Gross Profit/Turnover
Net Profit Margin This shows how much net profit the business makes for each $1 of sales. Net Profit Margin= Net Profit/Turnover
Budget This is a plan of how the money should be spent, it should be set out before the spendings occur. This is usually a plan for the whole year. Budget is created so it compares with the actual figures.
Indirect Cost These are the costs that is not directly related to the production of a product.
Created by: Jennie HSU