So,
our Business Math lessons started last week and I never thought that
Business Math has a huge relevance to my course. I've realized that
I'll be using this in the near future. Prof. Paner has taught us the
basics in Business Math. The terms you'll mostly encounter with your
business and while studying this subject. Let me share you a few
things that I've learned in our first week!

**Profit and Loss**

**Profit**is the amount by which the sales are greater than the cost of goods sold and the operating expenses.

**Margin**also means gain or profit.

The
formulas in computing profit are as follows;

Net
Sales = Gross Sales – Refunds and Allowances

Net
Profit = Gross Profit – Operating Expenses

The
net sales and profit may also be given in scheme diagram as follows:

Gross
Sales

__- Sales Returns and Allowances__

Net
Sales

__- Costs of Goods Sold__

Gross
Profit

*- Operating Expenses*

Net
Profit

1.

**Gross Sales**is the actual amount received for selling the goods.
2.

**Refunds**are amounts returned usually if goods are defective.
3.

**Net sales**are obtained when refunds are being deducted from the gross sales.
4.

**Costs of goods**sold or buying price is the amount paid for articles bought including the buying expenses.
To
compute for the cost of goods sold for a period of time, we have the
formula as follows:

Available
Goods = Beginning Inventory + Purchases Costs of Goods Sold =
Available Goods – Ending Inventory

The
above may be diagrammed as follows:

Beginning
Inventory

__+ Purchases__Goods For Sale__- Ending Inventory__Costs of Goods Sold
5.

**Inventory**is an itemized lists of goods on hand.
6.

**Gross Profi**t is the difference between the net sales and the cost of goods sold.
7.

**Operating expenses**or overhead are selling expenses such as salaries or wages, traveling expenses, rentals, water, electric bills, commissions, taxes.
8.

**Net Profit**is the amount obtained when all the selling expenses or other cost of doing business are deducted from the gross profit.
In
case the sales are less than the cost of goods sold, there is a loss.
The formulas in computing losses are as follows:

Gross
Loss = Costs of Goods Sold – Net Sales Net Loss = Gross Loss +
Operating Expenses

The
relationship of the terms of loss may be diagrammed schematically as
follows:

Cost
of Goods Sold

__- Net Sales__Gross Loss__+ Operating Expenses__Net Loss
That's
a lot to take in right? But I think this will help me a lot in
understanding business.:)

Watch
out for my next post!

XX,

*FMG*

I think Business Math is a very relevant to any course!Mad props to this blog!looking forward to your next posts!:)

ReplyDeleteWow I love your post! I feel like becoming an entrepreneur now. Thank you! This was really helpful! :D

ReplyDeleteThanks for sharing! Business Math is a lot to take indeed. But with a good and brief explanation, its easy to catch up. Learning the subject's basic terms is a good start to get to know the topic :)

ReplyDeleteThank you for sharing and pointing this out. I think it would greatly help a lot of people interested in entering a business. Thumbs up!

ReplyDeleteWow this will help people who wants to start a business. thank you! :)

ReplyDeleteThank you for sharing with us what you've learned in Business Math. Indeed, this will help those who are still clueless with profit and loss.

ReplyDeleteThank you for posting last week's lesson! This is really helpful!

ReplyDeleteThis is a very nice blog! Thanks for sharing your thoughts and knowledge. I'm looking forward to your next blog posts. Love you!

ReplyDeleteI love this blog. It really helped me a lot. I have now realized my full potential on becoming a business man. Hark! I might start my own business because of this. My future, has been seriously set in stone because of the help i got from this blog. Thank you so much Fashion Mathgirl!

ReplyDeleteThank you so much! What an informative blog! Waiting for the next ones! Cheers :)

ReplyDeleteThanks for sharing the formulas and for defining the terms as well. This definitely makes life easy! For those who are into business, this is a big help :)

ReplyDeleteThanks for this post :) This is very simple and easy to understand.

ReplyDeletethanks to this post, i will now easily understand business math :D

ReplyDelete