Sunday, June 17, 2012

We Learn About Profit and Loss

Hi readers! 



Learning business can never be without "Math". Yes. You heard right. Math. I know a lot of you, including me, don't like Math or "Business Math" at all. However, like what the title of my blog says, "Business Math Can Be Sweet". And to reward you, in this first blog post of mine, I'll share what we learned in class last Wednesday about Profit and Loss. I'll make it as sweet as cupcake and as easier as possible for your sake. :)







To begin, let's get familiarized with the terms. You don't need to memorize the meaning, however it will be of great help when you exert effort in understanding it. Also, Pay attention to the meaning of the terms because sometimes it gives secret formulas...

TERMS:
  • Profit - also means "margin". It is the amount by which the sales are greater than the cost of goods sold and the operating expenses. (In filipino term, it is what you call, tubo
  • Gross Sales - The actual amount received for selling
  • Refunds - are the amounts returned usually if goods are defective
  • Net Sales - obtained when refunds are deducted from the gross sales (There's a secret formula hidden! Net sales = Gross Sales - Refund)
  • Cost of Goods Sold - also called "buying price".It is the amount paid for articles bought including the buying expenses.
  • Inventory - itemized list of goods on hand
  • Gross Profit - is the difference between the net sales and cost of goods sold (Another secret formula! Gross Profit = Net Sales - Cost of Goods Sold)
  • Operating Expenses - or overhead are selling expenses such as salaries or wages, traveling expenses, rentals, water, electric bills, commissions, taxes.
  • Net Profit - is the amount obtained when all the selling expenses or other cost of doing business are deducted from the gross profit. (hint! hint! A secret formula! Net Profit = Gross Profit - Operating Expenses)

Now that you are familiarized with the terms, it's time to get to know the formulas. Understand and memorize it! Don't get scared with the term, memorize... believe me memorizing the formulas comes in very handy during tests and exams. It will be easier to memorize now that you have understood the terms above. 

FORMULAS:

Net sales = Gross Sales - Refunds & Alowances
Net Profit = Gross Profit - Operating Expenses

Available Goods = Beginning Inventory + Purchases
Cost of Goods Sold = Available Goods - Ending Inventory

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


Let's put your newly acquired Profit and Loss knowledge to the test! Written below are the two problems given to us by our professor :)  
  1. At the beginning of the year, the merchandise inventory of Almaric's store was P8,070. Purchase for 6 months amounted to P10,721. At the end of 6 months, the inventory stood P9,205. Find the cost of goods sold.
  2. A department store had gross sales amounting to P896,954. The cost of goods sold was P577,320.40; the operating expenses were P49,285.98, and refunds for defective goods amounted to P25,520.49. Find; a). net sales, b). gross profit, c). net profit
The Answers will be posted next week! I hope I had helped you make Business Math easier :) Thank you for reading! please feel free to comment if you have any questions, concerns and suggestions. 

This is Kat, believing that, Bussiness Math Can Be Sweet! :)


The articles posted in this blog has been done with professional guidance.View our professor's CV for evidence:  CRISENCIO M. PANER'S CV

  

36 comments:

  1. Nice strategy in making business lessons more fun :)

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  2. What a colorful post. Very informative as well. However I don't think memorizing formulas is the right way. One has to understand what one is learning to be able to fully master it. Good article though!

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    1. "One has to understand what one is learning to be able to fully master it." - I agree too! :) I think the way I wrote the article led you to think that I'm only after the "memorizing" part of the formulas... :) I'll fix my writing in the next post! :) thank you for your comment! :)

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    1. Sorry for deleting my first comment. Typo error. Anyway~

      I'm not really good with memorization, but thank you for posting a simple guide about business math :) In order to go further in the subject, one has to take the basics first. It's nice you included the terms for an easy reference.

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    2. You don't have to memorize it all at once :)
      Try to understand it first then answer practice problems... You'll somehow get a hang of it and later on you'll realize that you already know the formulas in your mind :)

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  4. Thank you for this post! You make the lesson easier by guiding your readers step by step! Good job!

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    1. Thank you! I'm flattered... but hey you've got a nice post too! :)

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  5. hello kat! Nice article:) and ofcourse, business is sweet:)

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  6. Yes math can be sweet especially when you are one with numbers. But as cupcakes, the flow of your explanation and the way you showed your terminologies is so sweet,simple, and easy to understand :) yes just like what you have said. :)

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    1. awww thank you!!! I'm glad that you've tasted the sweetness of business math in my post! ;)

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  7. Short but sweet! Makes me crave for more! Hope to learn something new again on your next entry! :D

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  8. Nice article! I can't wait to see the answers to your given problems!! More! MORE! And the cupcake is making me salivate yum! I hope I can taste the sweetness you've offered in this blog. =)))

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    1. Hahahahahaha! I'll post a photo of a cake next time to make you salivate more :))) Thanks for your very flattering comment :)

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  9. This is a very useful and informative article. Thank you for sharing, Kat! :)

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  10. this is very helpful! i like it when you said that "Business Math can be sweet"! this article suites for people who is not into Math! thank you! :)

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    1. "Business Math Can Be Sweet" hahahaha! :) thanks kat <3

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  12. Looking for more posts. Keep it up!

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  13. Your blog is very helpful indeed for those who want to enter the business world. And I think your title is also enticing to the eyes of the readers which makes it a bit catchy. Nice blog Katkat! Keep it up:*

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  14. Sweet! Learned a lot from your post. I'm not good in memorizing but this will help me a lot in knowing the formulas well! Thanks. keep it up!

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  15. mmmm... sweet indeed.. i am not a math-lover but i have a sweet tooth so I guess math sweetened, is a lot more fun. and i'm loving this post like i love sweets! :) keep up the good work. i'll be waiting for more sweet treats from you!

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    1. hmmmm more sweet treats... i'll keep that in mind :)

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  16. I totally love your post (guilty of loving cupcakes XD) I like your blog its very easy on the eyes. Thanks also for the definitions and formulas, I'll tune in for your next sweet post <3

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    1. don't worry i'll post more sweet treats next time :)

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  17. Nice article, easy to understand with your fun and sweet way of defining and giving emphasis to what is important. Indeed, math is sweet when you truly understand it. :)

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  18. Ah, this reminds me of my good ol' Marketing, Finance and Accounting classes ^_^

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