<< Chapter < Page Chapter >> Page >

Economic and management sciences

Grade 8

Business, consumer and financial knowledge and skills

Module 11

Leadership and business strategies to ensure profit

ACTIVITY 1: To be able to explain and apply the term profit [LO 3.2]

The nature of profit

Profit can be regarded as the difference between the income and expenditure of a business.

It is the amount by which income exceeds the expenditure incurred to produce the income.

The main objective of anyone who starts a business is to make maximum profit. This profit can be regarded as the owner’s compensation for the use of his capital. The profit he makes must be considerably more than the interest he would have earned if he had invested the money in the bank.

It is important for the business to be managed in such a way as to ensure a good return on the owner’s capital investment in his business.

Calculating profit

In order to calculate the profit, certain information about the business is required. This is obtained from a statement that is usually drawn up at the end of the financial year. The statement contains the income generated during a particular period, as well as the expenditure incurred in order to generate that income. This statement is called an Income Statement.

When calculating profit, businesses can be divided into two main groups according to the nature of their activities, namely:

service enterprises and

commercial enterprises

Service enterprises provide a service and earn an income by doing so, for example hairdressers, dry-cleaning businesses, medical practitioners, dentists, etc.

Commercial enterprises purchase merchandise and sell it at a higher price than the purchase price to make a profit.

The profit of these businesses can be calculated by doing a simple deduction, namely:

Profit = Income – Expenditure

  • Explain in your own words what you understand by the term profit .

Activity 2: to be able to explain and apply strategies to ensure a good profit on earnings [lo 3.2]

Effective leadership and management strategies are used to minimise expenditure and maximise income of a business.

One strategy is to exercise strict control over expenditure such as telephone, water, electricity, transport costs, stationery and advertising. These expenses must be compared monthly. If there is a significant increase the cause must be found and rectified.

At the same time the income must be kept as high as possible.

In a service enterprise, excellent service must be provided at all times, because satisfied clients are the best advertisement for any business.

In the case of commercial enterprises, the lowest possible purchase price and the highest possible selling price must be negotiated. One needs to compare the prices that other businesses charge for the same product or service.

A smaller profit margin in the short term could ensure a more sustainable profit in the long term.

The value of advertising and marketing campaigns must not be underestimated. These can be very expensive so the benefits must be weighed up against the costs.

Questions & Answers

A golfer on a fairway is 70 m away from the green, which sits below the level of the fairway by 20 m. If the golfer hits the ball at an angle of 40° with an initial speed of 20 m/s, how close to the green does she come?
Aislinn Reply
cm
tijani
what is titration
John Reply
what is physics
Siyaka Reply
A mouse of mass 200 g falls 100 m down a vertical mine shaft and lands at the bottom with a speed of 8.0 m/s. During its fall, how much work is done on the mouse by air resistance
Jude Reply
Can you compute that for me. Ty
Jude
what is the dimension formula of energy?
David Reply
what is viscosity?
David
what is inorganic
emma Reply
what is chemistry
Youesf Reply
what is inorganic
emma
Chemistry is a branch of science that deals with the study of matter,it composition,it structure and the changes it undergoes
Adjei
please, I'm a physics student and I need help in physics
Adjanou
chemistry could also be understood like the sexual attraction/repulsion of the male and female elements. the reaction varies depending on the energy differences of each given gender. + masculine -female.
Pedro
A ball is thrown straight up.it passes a 2.0m high window 7.50 m off the ground on it path up and takes 1.30 s to go past the window.what was the ball initial velocity
Krampah Reply
2. A sled plus passenger with total mass 50 kg is pulled 20 m across the snow (0.20) at constant velocity by a force directed 25° above the horizontal. Calculate (a) the work of the applied force, (b) the work of friction, and (c) the total work.
Sahid Reply
you have been hired as an espert witness in a court case involving an automobile accident. the accident involved car A of mass 1500kg which crashed into stationary car B of mass 1100kg. the driver of car A applied his brakes 15 m before he skidded and crashed into car B. after the collision, car A s
Samuel Reply
can someone explain to me, an ignorant high school student, why the trend of the graph doesn't follow the fact that the higher frequency a sound wave is, the more power it is, hence, making me think the phons output would follow this general trend?
Joseph Reply
Nevermind i just realied that the graph is the phons output for a person with normal hearing and not just the phons output of the sound waves power, I should read the entire thing next time
Joseph
Follow up question, does anyone know where I can find a graph that accuretly depicts the actual relative "power" output of sound over its frequency instead of just humans hearing
Joseph
"Generation of electrical energy from sound energy | IEEE Conference Publication | IEEE Xplore" ***ieeexplore.ieee.org/document/7150687?reload=true
Ryan
what's motion
Maurice Reply
what are the types of wave
Maurice
answer
Magreth
progressive wave
Magreth
hello friend how are you
Muhammad Reply
fine, how about you?
Mohammed
hi
Mujahid
A string is 3.00 m long with a mass of 5.00 g. The string is held taut with a tension of 500.00 N applied to the string. A pulse is sent down the string. How long does it take the pulse to travel the 3.00 m of the string?
yasuo Reply
Who can show me the full solution in this problem?
Reofrir Reply
Got questions? Join the online conversation and get instant answers!
Jobilize.com Reply

Get Jobilize Job Search Mobile App in your pocket Now!

Get it on Google Play Download on the App Store Now




Source:  OpenStax, Economic and management sciences grade 8. OpenStax CNX. Sep 11, 2009 Download for free at http://cnx.org/content/col11040/1.1
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Economic and management sciences grade 8' conversation and receive update notifications?

Ask