Profit and Loss for Business Mathematics.pptx

Profit and Loss

1. Business math

2. PROFIT AND LOSS

3. How does profit differ from loss? Selling an item at a price less than they paid when they bought it. Selling more than what they paid when they bought it. LOSS PROFIT POSITIVE VALUE NEGATIVE VALUE

4. HOW TO IDENTIFY PROFIT AND LOSS? Selling Price - Cost Profit/Loss

5. GROSS PROFIT NET LOSS To avoid loss in any business, the NS should be high enough to cover the CGS, operating expense (OE), possible deductions , taxes , and profit objective .

6. Gross Profit/Loss = NS – CGS NS = GS – (Sales Returns and Allowances + Discounts) NP/L can be computed using the formula: NP/L = GP/L - OE

7. Determining the CGS It is a must for any business to determine its profits (or losses) periodically. To calculate P/L, the CGS during a particular period is needed. To calculate the CGS, add purchases to the beginning inventory (BI) and then subtract the ending inventory (EI) . CGS = AGS - EI Available Goods for Sale = BI + Purchase

8. PROBLEM 1: At the beginning of a certain year, the inventory of Liz’s Skin Care & Spa was Php175,364.21, and purchases during the year amounted to Php50,789.64. At the end of that year, the manager had checked that they have remaining inventory of Php75,643.89. Determine the CGS. Given: BI = Php175,364.21 Purchases = Php50,789.64 EI = Php75,643.89 CGS = ?

9. PROBLEM 2: Your cousin has a mini-grocery store and according to him, he made purchases amounting to Php250,000 last year. As far as he remembers, his store’s ending inventory last year was only Php125,000. What was the beginning inventory of his grocery store if the CGS reflected in the financial statement was Php545,750?

10. net sales and gross sales indicates the amount of sales after deducting sales returns, allowances, and discounts . refers to the total amount of goods or service ( w/o deductions yet ), NS = GS – (SRA + D) Net sales Gross sales sales returns, allowances Discounts

11. NS = GS – (SRA + D) Net sales Gross sales sales returns, allowances Discounts A specialty store had gross sales amounting to Php1,250,000 and sales returns of Php269,708. How much were the net sales of the specialty store? PROBLEM 1:

12. Problem 2: If a wholesaler’s net sales last year were Php3,648,800, his gross sales were Php3,820,100 and his sales returns and allowances amounted to Php120,450, how much discount was given last year?

13. DETERMINING THE GROSS PROFIT (GP) Gross Profit is the amount left from the net sales after deducting the CGS. GP = NS - CGS

14. Problem 1: If the CGS by the specialty store was Php580,243, what was the gross profit of the specialty store whose net sales were Php980,292? GP = NS - CGS

15. PROBLEM 6: How much were the net sales of your ice cream house if your CGS and GP were Php85,675 and Php54,900 respectively?

16. Determining the NP/L Net profit or Net loss is the amount left after subtracting all the operating expenses from the gross profit. A positive value indicates that net profit is obtained. This is the result when the gross profit is greater than the operating expenses. NP/L = GP - OE

17. Problem 1: If the operating expenses of the specialty store include salaries and wages of Php156,798, rent expense of Php75,000, water and electric bills of Php15,000, and miscellaneous of Php4,500, what is the net profit of the specialty store if its gross profit was Php400,049? NP/L = GP - OE

18. PROBLEM 2: On the second month of operation, you strictly monitored and controlled the operating expenditures of your pizza house. Because of this, you were able to achieve a net profit of Php22,750 for the month. How much was the operating expenses for the month if your gross profit was Php51,595?