What does Breakeven refer to?
The point at which total revenue equals total costs, resulting in zero profit or loss
Helps determine the minimum level of revenue needed to cover expenses.
The formula for % Change is?
% Change = ((New Value - Old Value) / Old Value) * 100
Used to assess growth or decline.
What does ROI measure?
The profitability of an investment by comparing the gain or loss relative to its cost
A higher ROI indicates better investment performance.
The formula for ROI is?
ROI = (Profit / Investment Cost) * 100
Used to evaluate the efficiency of an investment.
What does Margin refer to?
The percentage of profit generated from sales
Indicates how much of each dollar of sales is profit.
The formula for Margin is?
Margin = (Revenue - Cost) / Revenue
Helps assess profitability.
What does Markup represent?
The amount added to the cost of a product to determine its selling price
Ensures profitability.
The formula for Markup is?
Markup = (Profit / Cost) * 100
Used in pricing strategies.
What is Market Share?
The portion of the total market that a company or product controls
Indicates competitiveness and market position.
The formula for Market Share is?
Market Share = (Company’s Sales / Total Market Sales) * 100
Helps assess a company’s market position.
Define Supply and Demand.
The relationship between the quantity of a product available and the quantity desired by customers
Helps assess pricing and market equilibrium.
What is a Cost-Benefit Analysis?
A comparison of costs incurred with expected benefits of a decision or project
Assists in evaluating feasibility and profitability.
What are Fixed and Variable Costs?
- Fixed costs: Constant regardless of production volume
- Variable costs: Change proportionally with production
Understanding cost structure helps analyze profitability.
What is Competitive Advantage?
Unique qualities or assets that differentiate a company from its competitors
Can include superior technology, brand recognition, or cost efficiency.
Define Market Segmentation.
Dividing a broad market into distinct groups based on characteristics
Helps target specific customer segments effectively.
What is the Value Chain?
The sequence of activities a company performs to create value for its customers
Includes inbound logistics, operations, outbound logistics, marketing, and customer service.
What does Opportunity Cost refer to?
The value of the next best alternative forgone when making a choice
Represents potential benefits sacrificed by choosing one option over another.
What are Economies of Scale?
When the average cost per unit decreases as production volume increases
Helps businesses reduce costs.
What are Economies of Scope?
Cost savings achieved by producing a variety of products using shared resources
Enhances efficiency.
What is a Balance Sheet?
A snapshot of a company’s financial position at a specific time
Lists assets, liabilities, and shareholders’ equity.
What is an Income Statement?
Summarizes a company’s revenues, expenses, and net income over a specific period
Helps evaluate profitability and performance.
What does a Cash Flow Statement track?
The flow of cash in and out of a company during a specific period
Assesses the company’s ability to generate and manage cash.
What is a SWOT Analysis?
Evaluates a company’s strengths, weaknesses, opportunities, and threats
Provides a comprehensive overview of internal and external factors.
What is a Stakeholder Analysis?
Identifies individuals or groups with a vested interest in a company’s operations
Helps understand their influence and potential impact on decision-making.
