Why do business exist?

Making money every organization has to make money

Income statement , P&L, statement of authorization, statement of earning,

Measinrg whether we are making profit, to keep us alive.

Revenue (topline/ sales)= is earned, recorded when it is earned

Lot of estimates and assumptions

Add and subtract, multiply and divide

Key ratio to understand This is good company or in trouble

Resources:

Business-literacy.com

HBR Financial intelligence

Project management for profit

HBR toolkit : business valuation, ROI

Contribution margin: revenue variable cost

Gross profit:

Net income, net profit, net earning all are same

Depriations/ amortize = non cash expenses, spreading expecse over the year. We depritiate physical
good, amortize tangible

Margin and mark up: profit/ revenues, cost/ revenues

EBITA = the potentials to generate cash of business. Used in cap ex

Bonus: operating income / revenue

Good gross profit and low EBIDA: Good gross profit should translate good ebita

Manufacturing and labor depending on how you , be consistent in categories

Looking at ROI sunk cost is irrelevant

Finance is looking forward, Accounts is looking at histories

Dividend is a money that goes directly to shareholder, visible in cash flow