Hi. can anyone explain business finance in terms of a market stall?? eg gross profit, net profit, turnover!?
I find it hard to understand things! however, give me an example i am familiar with and i get it just like that.i need to know all the business terms, net profit gross margin, tax employee contributions etc as much as possible !!!!thankyou guys!!!
Answer
I sell sweets at a market.
i pay £15 rent and it costs me £5 in travel expenses to get to the market.
i spend £100 at a wholesaler, and i sell the sweets for £200
my turnover is £200
my gross margin is 50% (half of my turnover)
my mark-up is 100% (my selling price is 100% more than my cost price)
my gross profit is £100
my net profit is £80 (£100 minus rent, car expenses etc.)
tax is paid as a percentage of the net profit.
