This document provides information about Module 8 of an entrepreneurship course for Grade 12 students. It discusses computing gross profit, including defining key terms like revenue, costs, gross profit, gross profit rate, operating profit margin, and net profit margin. It provides examples of how to calculate these values. The module aims to teach students to correctly compute and interpret financial ratios in order to appreciate their importance for tracking business performance and decision making.
Entrepreneurship12_q2_Mod8_Computation of Gross Profit_v4.pdfLeeYooImprogoTanIII
This document provides information about computing gross profit. It defines gross profit as the difference between net sales and cost of sales. It then provides an example to demonstrate how to calculate gross profit using a formula. Specifically, it takes the net sales of a company (XYZ Trading) in 2017, subtracts the cost of sales, and the remainder is the gross profit. Calculating gross profit is important for determining the profitability of a business.
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
A1 Experiential Learning Project Apply the Design Thinking App.docxdaniahendric
A1: Experiential Learning Project:
Apply the Design Thinking Approach to the creation of a new service and prepare a presentation of the entire process.
The presentation should include all the following major steps of Design Thinking Approach:
a) Understand. Referring to available sources (own experience, outside experts …) research the status quo on
the concept you would like to develop
b) Observe: conduct an ethnographic research by firsthand observation of potential users
c) Ideate: create as many ideas as possible (use techniques as brainstorming). Select the most promising idea
d) Prototype: translate the idea into a simple representation of the app
e) Test: the model with target users. Interact with them. Observe their reactions and behavior and collect
feed-backs to refine the concept
f) The work should also include the marketing plan of the new service.
Outcome requirements:
The slide/visual presentation (format can be selected by the team) will contain the steps in the agenda
mentioned above and it will present the service concept. A visual representation of the service is mandatory.
The Experiential Learning Project will be scored across four (4) attributes based on:
a) Applying the Design Thinking Model. For this first score, the instructor will assess the extent to which
students are able to apply the model into a simulated-real life situation
b) Transforming observations and data into usable information. For this second score, the instructor will
evaluate the extent to which students were able to organize information collected on field analysis in a
presentable fashion (i.e., table, figures, videos …)
c) Creativity: For the third score, the instructor will assess the extent to which students are able to apply
creativity in a new service development and into the presentation itself
d) Original Results: For the fourth score, the instructor will assess the extent to which students are able to
apply the innovation drivers to their project
**********EXAMPLE************
This class was maybe the most troublesome of some other class I have taken at TUI. Be that as it may, I can say I have left with a superior comprehension of Principles of Accounting. The inside and out readings of how to comprehend organizations money related wellbeing was exceptionally enlightening, yet for the present minute isn't important to what I do.
An idea that was precious to me was opportunity costs. They comprise of decisions that make substitute occasions inside people. For myself being a dad of three, officer, and understudy, I in some cases feel that I am out of luck, yet l still figure out how to get past this voyage called life. Deciding to plan something that is going for require penances is a lot of merited, and can have an advantageous effect whenever finished.
The SLP for Module 3 was intriguing on the grounds that as customers, we investigate the "four P's" constantly while shopping. Being from a little Pacific island, regardless we use ...
- The business has been bought out by a new owner who is skeptical about budgets and financial controls.
- You and a colleague have been asked to make a presentation to the new owner and board to explain how budgets are useful and how controlling budgets and resources can improve business performance.
- The presentation will show how budgets will be used, explain why they are useful, and to what extent controlling budgets and managing resources effectively can help improve business performance.
Grey matter university introduction to e commerce financials - the basicsNed Barrett
In this lesson, we discuss how to construct and evaluate basic e-commerce profit and loss statements. This is especially helpful for companies or individuals who are trying to start a new e-commerce business or who are trying to add sophistication and financial diagnostics to an existing business.
Accounting Career Essay
Accounting Essay
Essay- Accounting as a Profession
Luca Paciollis Accounting System
Accrual Basis Accounting Essay example
Accounting as a Professional School Essay
Financial Accounting Essay
Accounting Essay
Reflection Paper In Accounting
The Fundamentals Of Financial Accounting
Accounting Essay
Persuasive Essay On Forensic Accounting
Bank Accounting Essay
Reflection Paper Accounting
Accounting
My Professional Field Is Accounting Essay
Issues in Accounting Essay example
Accounting Essay
What Is An Accountant? Essay
Accounting Career Essay
Accounting Essay
Essay- Accounting as a Profession
Luca Paciollis Accounting System
Accrual Basis Accounting Essay example
Accounting as a Professional School Essay
Financial Accounting Essay
Accounting Essay
Reflection Paper In Accounting
The Fundamentals Of Financial Accounting
Accounting Essay
Persuasive Essay On Forensic Accounting
Bank Accounting Essay
Reflection Paper Accounting
Accounting
My Professional Field Is Accounting Essay
Issues in Accounting Essay example
Accounting Essay
What Is An Accountant? Essay
Entrepreneurship12_q2_Mod8_Computation of Gross Profit_v4.pdfLeeYooImprogoTanIII
This document provides information about computing gross profit. It defines gross profit as the difference between net sales and cost of sales. It then provides an example to demonstrate how to calculate gross profit using a formula. Specifically, it takes the net sales of a company (XYZ Trading) in 2017, subtracts the cost of sales, and the remainder is the gross profit. Calculating gross profit is important for determining the profitability of a business.
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
Find Best Online Accounting Course | Academy Tax4wealthAcademy Tax4wealth
Accounting and Taxation are topics that will always be relevant. An aptitude for math and finance is necessary for accounting. Several abilities are needed to succeed in accounting and taxation interviews. Learn more!
For more info, visit us at:-
https://academy.tax4wealth.com/blog/top-30-accounting-and-taxation-interview-question-answer
A1 Experiential Learning Project Apply the Design Thinking App.docxdaniahendric
A1: Experiential Learning Project:
Apply the Design Thinking Approach to the creation of a new service and prepare a presentation of the entire process.
The presentation should include all the following major steps of Design Thinking Approach:
a) Understand. Referring to available sources (own experience, outside experts …) research the status quo on
the concept you would like to develop
b) Observe: conduct an ethnographic research by firsthand observation of potential users
c) Ideate: create as many ideas as possible (use techniques as brainstorming). Select the most promising idea
d) Prototype: translate the idea into a simple representation of the app
e) Test: the model with target users. Interact with them. Observe their reactions and behavior and collect
feed-backs to refine the concept
f) The work should also include the marketing plan of the new service.
Outcome requirements:
The slide/visual presentation (format can be selected by the team) will contain the steps in the agenda
mentioned above and it will present the service concept. A visual representation of the service is mandatory.
The Experiential Learning Project will be scored across four (4) attributes based on:
a) Applying the Design Thinking Model. For this first score, the instructor will assess the extent to which
students are able to apply the model into a simulated-real life situation
b) Transforming observations and data into usable information. For this second score, the instructor will
evaluate the extent to which students were able to organize information collected on field analysis in a
presentable fashion (i.e., table, figures, videos …)
c) Creativity: For the third score, the instructor will assess the extent to which students are able to apply
creativity in a new service development and into the presentation itself
d) Original Results: For the fourth score, the instructor will assess the extent to which students are able to
apply the innovation drivers to their project
**********EXAMPLE************
This class was maybe the most troublesome of some other class I have taken at TUI. Be that as it may, I can say I have left with a superior comprehension of Principles of Accounting. The inside and out readings of how to comprehend organizations money related wellbeing was exceptionally enlightening, yet for the present minute isn't important to what I do.
An idea that was precious to me was opportunity costs. They comprise of decisions that make substitute occasions inside people. For myself being a dad of three, officer, and understudy, I in some cases feel that I am out of luck, yet l still figure out how to get past this voyage called life. Deciding to plan something that is going for require penances is a lot of merited, and can have an advantageous effect whenever finished.
The SLP for Module 3 was intriguing on the grounds that as customers, we investigate the "four P's" constantly while shopping. Being from a little Pacific island, regardless we use ...
- The business has been bought out by a new owner who is skeptical about budgets and financial controls.
- You and a colleague have been asked to make a presentation to the new owner and board to explain how budgets are useful and how controlling budgets and resources can improve business performance.
- The presentation will show how budgets will be used, explain why they are useful, and to what extent controlling budgets and managing resources effectively can help improve business performance.
Grey matter university introduction to e commerce financials - the basicsNed Barrett
In this lesson, we discuss how to construct and evaluate basic e-commerce profit and loss statements. This is especially helpful for companies or individuals who are trying to start a new e-commerce business or who are trying to add sophistication and financial diagnostics to an existing business.
Accounting Career Essay
Accounting Essay
Essay- Accounting as a Profession
Luca Paciollis Accounting System
Accrual Basis Accounting Essay example
Accounting as a Professional School Essay
Financial Accounting Essay
Accounting Essay
Reflection Paper In Accounting
The Fundamentals Of Financial Accounting
Accounting Essay
Persuasive Essay On Forensic Accounting
Bank Accounting Essay
Reflection Paper Accounting
Accounting
My Professional Field Is Accounting Essay
Issues in Accounting Essay example
Accounting Essay
What Is An Accountant? Essay
Accounting Career Essay
Accounting Essay
Essay- Accounting as a Profession
Luca Paciollis Accounting System
Accrual Basis Accounting Essay example
Accounting as a Professional School Essay
Financial Accounting Essay
Accounting Essay
Reflection Paper In Accounting
The Fundamentals Of Financial Accounting
Accounting Essay
Persuasive Essay On Forensic Accounting
Bank Accounting Essay
Reflection Paper Accounting
Accounting
My Professional Field Is Accounting Essay
Issues in Accounting Essay example
Accounting Essay
What Is An Accountant? Essay
ENTREP12_Q2_M6_4M_S OF PRODUCTION AND BUSINESS MODEL.pdfVisitorNomad
This document provides an overview of the 4 M's of production (Manpower, Method, Machine, Materials) and how they relate to developing a business model and business opportunity. It defines each of the 4 M's and explains their importance in the production process and business operations. The document also discusses other related concepts like product description, prototyping, benefits, suppliers, supply chain, value chain, and how effective management of these can improve business efficiency and competitiveness.
ENTREP12_Q2_M6_4M_S OF PRODUCTION AND BUSINESS MODEL.pdf302042
This document provides an overview of the 4 M's of production (Manpower, Method, Machine, Materials) and how they relate to developing a business model and business opportunity. It defines each of the 4 M's and explains how an entrepreneur must consider them in the production process. The document also discusses other related concepts like the production system, product description, prototyping, benefits, pretesting, suppliers, value chain, and supply chain management. The goal is to help the learner understand the importance of production processes and factors to consider when starting a business.
The document outlines 14 modules covering topics related to managing business functions like financial projections, customer relationship management, productivity analysis, and human resources. It includes lessons, activities, and assessments for entrepreneurs to learn essential skills for starting and growing a business venture.
Branches of Accounting What You Need to Know When Writing an Assignment.pdfMatt Brown
Accounting is a fascinating and complex field, so it can be hard to know where to start when writing an assignment. This article will give a couple of supportive tips to fanning out into new areas of bookkeeping. You will be better able to write about the various accounting fields accurately and thoroughly if you comprehend them. When writing your next assignment, keep these suggestions in mind!
The document provides information about budgeting for small businesses. It begins with definitions of key budgeting terms like revenues, expenses, profits and costs. It then outlines the basic budgeting process which involves targeting a profit level, estimating expenses, calculating gross profit margins, and estimating sales revenues. An example budget is provided for a sample company, A&A Pool Supply, which illustrates how to estimate expenses, revenues, and profits for the coming year based on historical financial data and expected business changes. The goal is to construct a preliminary budget that can then be adjusted and finalized.
Accounting plays an important role in business operations by tracking spending, profit, loss and other financial activities. Businesses are very dependent on their accounting departments, which are responsible for monitoring cash flow, complying with tax laws, and ensuring financial reporting is accurate. Financial statements like the balance sheet, income statement, and statement of cash flows provide useful information to both internal managers and external stakeholders in making financial decisions about the business. Budgeting is an important planning tool that helps management make good decisions by planning ahead, prioritizing goals, and identifying financial issues.
The document discusses contemporary economic issues affecting Filipino entrepreneurs such as investment and interest rates, rentals, minimum wage, and taxes. It provides definitions and explanations of these key terms. Specifically, it notes that starting entrepreneurs often struggle to obtain capital and face high interest rates on loans. They also have to pay rent for business spaces and comply with minimum wage laws. Additionally, various taxes imposed by the government like income tax and VAT are outflows for businesses. The document aims to help students understand the challenges faced by local entrepreneurs.
This document provides information on managing cash flow for a business. It discusses the key activities of a business - production, marketing, and accounting. It emphasizes the importance of understanding flows of activity through an organization. This includes communication, sales, treasury, production, quality control, public relations, and executive functions. The document stresses establishing systems to free up an entrepreneur's time and empower others. It defines important financial statements and ratios used to analyze a business's performance and cash flow. Accounting software and bookkeepers are addressed. The purpose of accounting is to improve profits and manage cash flow through coordination of production, marketing, and accounting. Cash flow management involves accelerating cash inflows and slowing outflows.
MODULE 1: The Building Blocks
The Objectives for this Module are:
-To understand the basic terms and concepts in accounting (covered in this module)
-To practice basic accounting concepts
-To be exposed to examples that highlight core concepts
-To demystify the field of basic accounting and finance for professionals who may not have a background in the subject
This document discusses various topics related to accounting as a profession. It begins by defining accounting and describing the wide variety of roles that accountants perform beyond just preparing financial statements, such as analyzing costs and efficiencies, participating in mergers and acquisitions, developing information systems, and managing taxes and benefits. It then outlines some career paths one can take in accounting, such as auditing, budget analysis, and financial accounting. It also notes the expected job growth and outlook for the field.
Learning ObjectivesUpon completion of Chapter 6 you will b.docxsmile790243
Learning Objectives
Upon completion of Chapter 6 you will be able to:
• Understand the importance of incremental after-tax cash flows.
• Be able to estimate incremental after-tax cash flows.
• Be able to calculate the tax consequences on an asset sale.
• Understand why sunk costs do not matter in capital budgeting.
• Know the three categories of cash flows typically seen in an investment proposal.
Relevant Cash Flows for
Capital Budgeting
6
iStockphoto/Thinkstock
byr80656_06_c06_141-160.indd 141 3/28/13 3:32 PM
CHAPTER 6Section 6.1 How to Compute Cash Flows
A company’s very first goal is staying financially healthy; a bankrupt company helps no one, neither owners nor employees nor customers. Financial health requires that bills and debts be paid in full and on time. This is done with cash. Cash
is what lets a company keep its doors open and the lights on. Cash keeps the machines
running, the raw materials flowing into factories, and the finished goods flowing out.
In Chapter 2 we explained why cash flow is more important than accounting profits. We
repeat that message here because it is so important. A company cannot pay its employ-
ees, suppliers, banks, or tax agencies with net income. Those entities only accept cash. In
Chapter 2 we also explained why cash flow and accounting profit (net income or profit
after tax) differ. As a quick reminder, it has to do with how revenue is recognized, how
costs are matched to sales, and how some costs are allocated over time via depreciation.
In this chapter we expand the discussion of cash flow to exactly which type of cash flows
we use when analyzing investment opportunities or determining a company’s financial
health. We draw on accounting, tax rules, and economic theory to arrive at the appropri-
ate cash flows for financial analysis. In a corporate setting, investment analysis is called
capital budgeting: the decision about how to best budget investment capital to create
wealth for shareholders.
6.1 How to Compute Cash Flows
We discussed how to use accounting statements to estimate cash flows in Chapter 2. There we showed a simple approach that gave a reasonable approximation in most cases and a more complete approach. The simple approach just added
depreciation expense back to net income to find an estimate of cash flow. This approach is
usually fairly close to the exact value because depreciation is usually the primary account
that causes net income and cash flow to differ.
The more complete approach begins with net income and subtracts increases in assets and
adds increases in liabilities. Note that depreciation expense will be included in changes in
fixed assets or property, plant, and equipment (PP&E), so is not treated separately as it was
in the simple approach. If you are not comfortable with translating accounting data into
cash flows, be sure to review the more detailed description of the process in Chapter 2.
The appropriate cash flows for eval ...
This document discusses activities companies should complete before seeking outside capital, including maintaining organized financial records and developing a compelling business plan. It recommends organizing accounting systems to provide useful information and creating documents like a capital deployment plan. The document also covers pre-money valuation, noting it is based on discounted cash flow methodology and various estimates of cash flow that can be used. Completing the recommended activities helps reduce risk and supports determining a valuation range for the company.
The document provides 9 practical finance tips for entrepreneurs to confidently discuss finances with their CFO, including understanding key financial statements like the income statement, balance sheet, and cash flow statement; the differences between accounting and finance, revenues and expenses; as well as budgets, depreciation, and the differences between profits and cash. It aims to demystify financial concepts in a straightforward way for business owners.
The document contains definitions and explanations of various accounting terms:
1. Intangible assets are assets that cannot be seen or touched, such as goodwill, patent rights, and trademarks.
2. Contra entries refer to transfers between cash and bank accounts within a cashbook.
3. Working capital is calculated as current assets minus current liabilities and refers to capital available for day-to-day business operations.
4. Ratio analysis simplifies financial statements and allows for comparison within and between firms to aid planning.
Finance is the language of business. To make effective business decisions, you have to understand and speak the terms in which business is measured. Top management decides on the basis of numbers. So, do you have a choice but to make the effort to start talking numbers confidently. This FREE eguide helps you take the first steps to financial intelligence.
ENTREP12_Q2_M6_4M_S OF PRODUCTION AND BUSINESS MODEL.pdfVisitorNomad
This document provides an overview of the 4 M's of production (Manpower, Method, Machine, Materials) and how they relate to developing a business model and business opportunity. It defines each of the 4 M's and explains their importance in the production process and business operations. The document also discusses other related concepts like product description, prototyping, benefits, suppliers, supply chain, value chain, and how effective management of these can improve business efficiency and competitiveness.
ENTREP12_Q2_M6_4M_S OF PRODUCTION AND BUSINESS MODEL.pdf302042
This document provides an overview of the 4 M's of production (Manpower, Method, Machine, Materials) and how they relate to developing a business model and business opportunity. It defines each of the 4 M's and explains how an entrepreneur must consider them in the production process. The document also discusses other related concepts like the production system, product description, prototyping, benefits, pretesting, suppliers, value chain, and supply chain management. The goal is to help the learner understand the importance of production processes and factors to consider when starting a business.
The document outlines 14 modules covering topics related to managing business functions like financial projections, customer relationship management, productivity analysis, and human resources. It includes lessons, activities, and assessments for entrepreneurs to learn essential skills for starting and growing a business venture.
Branches of Accounting What You Need to Know When Writing an Assignment.pdfMatt Brown
Accounting is a fascinating and complex field, so it can be hard to know where to start when writing an assignment. This article will give a couple of supportive tips to fanning out into new areas of bookkeeping. You will be better able to write about the various accounting fields accurately and thoroughly if you comprehend them. When writing your next assignment, keep these suggestions in mind!
The document provides information about budgeting for small businesses. It begins with definitions of key budgeting terms like revenues, expenses, profits and costs. It then outlines the basic budgeting process which involves targeting a profit level, estimating expenses, calculating gross profit margins, and estimating sales revenues. An example budget is provided for a sample company, A&A Pool Supply, which illustrates how to estimate expenses, revenues, and profits for the coming year based on historical financial data and expected business changes. The goal is to construct a preliminary budget that can then be adjusted and finalized.
Accounting plays an important role in business operations by tracking spending, profit, loss and other financial activities. Businesses are very dependent on their accounting departments, which are responsible for monitoring cash flow, complying with tax laws, and ensuring financial reporting is accurate. Financial statements like the balance sheet, income statement, and statement of cash flows provide useful information to both internal managers and external stakeholders in making financial decisions about the business. Budgeting is an important planning tool that helps management make good decisions by planning ahead, prioritizing goals, and identifying financial issues.
The document discusses contemporary economic issues affecting Filipino entrepreneurs such as investment and interest rates, rentals, minimum wage, and taxes. It provides definitions and explanations of these key terms. Specifically, it notes that starting entrepreneurs often struggle to obtain capital and face high interest rates on loans. They also have to pay rent for business spaces and comply with minimum wage laws. Additionally, various taxes imposed by the government like income tax and VAT are outflows for businesses. The document aims to help students understand the challenges faced by local entrepreneurs.
This document provides information on managing cash flow for a business. It discusses the key activities of a business - production, marketing, and accounting. It emphasizes the importance of understanding flows of activity through an organization. This includes communication, sales, treasury, production, quality control, public relations, and executive functions. The document stresses establishing systems to free up an entrepreneur's time and empower others. It defines important financial statements and ratios used to analyze a business's performance and cash flow. Accounting software and bookkeepers are addressed. The purpose of accounting is to improve profits and manage cash flow through coordination of production, marketing, and accounting. Cash flow management involves accelerating cash inflows and slowing outflows.
MODULE 1: The Building Blocks
The Objectives for this Module are:
-To understand the basic terms and concepts in accounting (covered in this module)
-To practice basic accounting concepts
-To be exposed to examples that highlight core concepts
-To demystify the field of basic accounting and finance for professionals who may not have a background in the subject
This document discusses various topics related to accounting as a profession. It begins by defining accounting and describing the wide variety of roles that accountants perform beyond just preparing financial statements, such as analyzing costs and efficiencies, participating in mergers and acquisitions, developing information systems, and managing taxes and benefits. It then outlines some career paths one can take in accounting, such as auditing, budget analysis, and financial accounting. It also notes the expected job growth and outlook for the field.
Learning ObjectivesUpon completion of Chapter 6 you will b.docxsmile790243
Learning Objectives
Upon completion of Chapter 6 you will be able to:
• Understand the importance of incremental after-tax cash flows.
• Be able to estimate incremental after-tax cash flows.
• Be able to calculate the tax consequences on an asset sale.
• Understand why sunk costs do not matter in capital budgeting.
• Know the three categories of cash flows typically seen in an investment proposal.
Relevant Cash Flows for
Capital Budgeting
6
iStockphoto/Thinkstock
byr80656_06_c06_141-160.indd 141 3/28/13 3:32 PM
CHAPTER 6Section 6.1 How to Compute Cash Flows
A company’s very first goal is staying financially healthy; a bankrupt company helps no one, neither owners nor employees nor customers. Financial health requires that bills and debts be paid in full and on time. This is done with cash. Cash
is what lets a company keep its doors open and the lights on. Cash keeps the machines
running, the raw materials flowing into factories, and the finished goods flowing out.
In Chapter 2 we explained why cash flow is more important than accounting profits. We
repeat that message here because it is so important. A company cannot pay its employ-
ees, suppliers, banks, or tax agencies with net income. Those entities only accept cash. In
Chapter 2 we also explained why cash flow and accounting profit (net income or profit
after tax) differ. As a quick reminder, it has to do with how revenue is recognized, how
costs are matched to sales, and how some costs are allocated over time via depreciation.
In this chapter we expand the discussion of cash flow to exactly which type of cash flows
we use when analyzing investment opportunities or determining a company’s financial
health. We draw on accounting, tax rules, and economic theory to arrive at the appropri-
ate cash flows for financial analysis. In a corporate setting, investment analysis is called
capital budgeting: the decision about how to best budget investment capital to create
wealth for shareholders.
6.1 How to Compute Cash Flows
We discussed how to use accounting statements to estimate cash flows in Chapter 2. There we showed a simple approach that gave a reasonable approximation in most cases and a more complete approach. The simple approach just added
depreciation expense back to net income to find an estimate of cash flow. This approach is
usually fairly close to the exact value because depreciation is usually the primary account
that causes net income and cash flow to differ.
The more complete approach begins with net income and subtracts increases in assets and
adds increases in liabilities. Note that depreciation expense will be included in changes in
fixed assets or property, plant, and equipment (PP&E), so is not treated separately as it was
in the simple approach. If you are not comfortable with translating accounting data into
cash flows, be sure to review the more detailed description of the process in Chapter 2.
The appropriate cash flows for eval ...
This document discusses activities companies should complete before seeking outside capital, including maintaining organized financial records and developing a compelling business plan. It recommends organizing accounting systems to provide useful information and creating documents like a capital deployment plan. The document also covers pre-money valuation, noting it is based on discounted cash flow methodology and various estimates of cash flow that can be used. Completing the recommended activities helps reduce risk and supports determining a valuation range for the company.
The document provides 9 practical finance tips for entrepreneurs to confidently discuss finances with their CFO, including understanding key financial statements like the income statement, balance sheet, and cash flow statement; the differences between accounting and finance, revenues and expenses; as well as budgets, depreciation, and the differences between profits and cash. It aims to demystify financial concepts in a straightforward way for business owners.
The document contains definitions and explanations of various accounting terms:
1. Intangible assets are assets that cannot be seen or touched, such as goodwill, patent rights, and trademarks.
2. Contra entries refer to transfers between cash and bank accounts within a cashbook.
3. Working capital is calculated as current assets minus current liabilities and refers to capital available for day-to-day business operations.
4. Ratio analysis simplifies financial statements and allows for comparison within and between firms to aid planning.
Finance is the language of business. To make effective business decisions, you have to understand and speak the terms in which business is measured. Top management decides on the basis of numbers. So, do you have a choice but to make the effort to start talking numbers confidently. This FREE eguide helps you take the first steps to financial intelligence.
Similar to ENTREP12_Q2_M8_COMPUTATION OF GROSS PROFITS.pdf (15)
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
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How to Make a Field Mandatory in Odoo 17Celine George
In Odoo, making a field required can be done through both Python code and XML views. When you set the required attribute to True in Python code, it makes the field required across all views where it's used. Conversely, when you set the required attribute in XML views, it makes the field required only in the context of that particular view.
Walmart Business+ and Spark Good for Nonprofits.pdfTechSoup
"Learn about all the ways Walmart supports nonprofit organizations.
You will hear from Liz Willett, the Head of Nonprofits, and hear about what Walmart is doing to help nonprofits, including Walmart Business and Spark Good. Walmart Business+ is a new offer for nonprofits that offers discounts and also streamlines nonprofits order and expense tracking, saving time and money.
The webinar may also give some examples on how nonprofits can best leverage Walmart Business+.
The event will cover the following::
Walmart Business + (https://business.walmart.com/plus) is a new shopping experience for nonprofits, schools, and local business customers that connects an exclusive online shopping experience to stores. Benefits include free delivery and shipping, a 'Spend Analytics” feature, special discounts, deals and tax-exempt shopping.
Special TechSoup offer for a free 180 days membership, and up to $150 in discounts on eligible orders.
Spark Good (walmart.com/sparkgood) is a charitable platform that enables nonprofits to receive donations directly from customers and associates.
Answers about how you can do more with Walmart!"
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
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Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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2. Development Team of the Module
Illustrator & Layout Artist: PSSg Edzel M. Dominguez, Ivy O. Niñeza
Management Team: Arturo B. Bayocot, PhD, CESO III, Regional Director
Victor G. De Gracia Jr., PhD, CESO V, ARD
Mala Epra B. Magnaong, Chief CLMD
Bienvenido U. Tagolimot, Jr., PhD, Reg EPS ADM
Elson C. Jamero, EPS-Designate-TLE
Marie Emerald A. Cabigas, PhD, Reg EPS, LRMS
Erlinda G. Dael, CESE, PhD, CID Chief
Celieto B. Magsayo, Div LR Supervisor
Andrian S. Tecson, Div ADM Coordinator
Entrepreneurship – Grade 12
Alternative Delivery Mode
Quarter 2 - Module 8
Second Edition, 2021
Republic Act 8293, section 176 states that: “No copyright shall subsist in any work of the
Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such
agency or office may, among other things, impose as a condition, payment of royalty.”
Borrowed materials included in this module are owned by the respective copyright holders. Effort
has been exerted to locate and seek permission to use these materials from the respective copyright
owners. The publisher and author do not represent nor claim ownership over them.
Writers: Joel Y. Yacas Janice B. Dominguez
Naneth M. Valdehuesa Ronee D. Quicho
Mary Cris A. Maquilan Marylinda T. Puzon
Charity E. Parel Denver E. Neri
Lorena Fe S. Anub Ethel Lalaine B. Morales
Evaluators: Cherryl F. Descallar Jessie Cris N. Abrogueña
Eddy Lou T. Hamak Milger A. Baang
Sherriemae V. Reazol
Printed in the Philippines by: Department of Education – Regional Office 10
Office Address: Zone 1, Upper Balulang Cagayan de Oro City 9000
Telefax: (088) 880-7071, (088) 880-7072
E-mail Address: region10@deped.gov.ph
4. 4 CO_Q2_Entrepreneurship SHS
Module 8
Introductory Message
For the Learner
Have you ever dreamed of becoming the next multi-millionaire? If you’re thinking that
winning the lottery is the only way to become one, well, think again. It is not chance
that gives you millions, instead being a millionaire is a result of hard work and
determination. Starting your own business is a good beginning towards fulfilling your
dreams. Entrepreneurship is the way!
You may often hear the word entrepreneur and entrepreneurship. But what do these
terms mean? You may refer to an entrepreneur as the person managing the business
and entrepreneurship as the business venture. Some may say there is no difference.
So, what does this module provide you towards reaching your dreams?
1. It outlines the concepts and basic principles, and processes of developing a
business plan.
2. It helps you understand the environment and market in your locality as a factor in
developing a business concept.
3. It allows you to experience starting and operating your own business.
Substantial knowledge of entrepreneurial principles and processes is important as this
increases the chances of making your business successful.
In this module, you are guided with a set of learning parts that will help you understand
the underlying principles of entrepreneurship.
1. What I Need to Do – the part used to introduce the learning objectives in this
module.
2. What I Know – this is an assessment as to your level of knowledge to the subject
matter at hand, meant specifically to gauge previous knowledge.
3. What’s In – the part used to connect your previous learning with the new lesson.
4. What’s New – the part used to introduce new lesson through a story, an activity, a
poem, song, situation or activity.
5. What is It – the part that will help you discover and understand entrepreneurial
concepts.
6. What’s More – the part that will help enrich your learnings of entrepreneurial
concepts.
7. What I Have Learned – the part that will help you process what you have learned
In the lesson.
8. What I Can Do – the part that allows you to apply what you have learned into real life
situations.
9. Assessment – the part that evaluates your level of mastery in achieving the
learning objectives.
10. Additional Activities – the part that enhances your learning and improves your
mastery of the lesson.
5. 1 CO_Q2_Entrepreneurship SHS
Module 8
What I Need to Know
As we all know, profit is a financial gain from a transaction or from a period of
investment or business activity, usually calculated as income in excess of costs or as
the final value of an asset in excess of its initial value.
It is the total revenue minus total expenses, profit is the amount of money a
business "makes" during a given accounting period. The more profit you make, the
better, as profit can be re-invested into the business or retained by the business
owners. Being able to accurately determine your business's profit is an essential part
of being able to judge its financial health. It can also help you decide how to price your
goods and services, how to pay your employees, and more.
To make your business gain more profit, begin by adding up all of the money
your business has made in a set period of time, (either, quarterly, yearly, monthly,etc.)
other sources, like products sold, services rendered, membership payments, or, in the
case of government agencies, taxes, fees, the sales of resource rights, and so on.
Note that you will need to subtract any amount of cash refunded to customers
for returns or disputes in order to find an accurate figure for your total income.
It's easier to understand the process of calculating a business's profit by
following along with an example.
Let's say that we own a small publishing business. In the last month, we sold
P20,000 worth of books to retailers in the area. However, we also sold the rights to
one of our intellectual properties for P7,000 and received P3,000 from book retailers
for official promotional materials. If these represent all of our revenue sources, we can
say that our total income is P20,000 + P7,000 + P3,000 = P30,000.
This module is divided into two lessons:
Lesson 1 – Compute for profits CS_EP11/12ENTREP-0h-j-16
Lesson 2 – Create the company’s five (5) year projected financial
statementsCS_EP11/12ENTREP-0h-j-17
To be able to successfully complete this module, previous knowledge in adding
and multiplying numbers will best help.
6. 2 CO_Q2_Entrepreneurship SHS
Module 8
After carefully studying the contents of this module, you should be able to:
Identify essential components in computing revenues and costs;
Differentiate between gross profit, operating profit and net profit;
Interpret financial ratios such as the gross profit rate, operating profit margin and
net profit margin;
Compute actual revenues;
Compute actual costs;
Compute gross profit, operating profit and net profit;
Compute the gross profit rate, operating profit margin and net profit margin;
Create profit schedules and reports;
Appreciate the importance of keeping track with the performance of one’s business
through the correct and honest computation and reporting of business profit; and
Appreciate the importance of the correct computation and interpretation of
financial ratios gross profit rate, operating profit margin and net profit margin.
What I Know
Let us see what you already know about forecasting revenues and costs.
Answer the questions below.
Write True if the statement is correct and write False if you think the statement is not
correct.
1. The gross profit rate of the entrepreneurial venture is computed by
dividing the cost of goods sold by net sales.
2. The gross profit rate provides information on the cost ratio of the
business.
3. In evaluating the profitability of the entrepreneurial venture, the
evaluation must focus on the information reflected on the face of the
balance sheet.
4. The operating profit margin rate indicates information on the
percentage of operating expenses on the net sales.
7. 3 CO_Q2_Entrepreneurship SHS
Module 8
5. Mr. Q is a practicing Doctor of Medicine. During the month of March
2019, he received Professional Fees amounting to P 1,000,000 and
total expenses of P250,000. The net income of Mr. Q is P 750,000.
_________ 6. Profit is the money received from the customer in exchange of
products given to customer.
7. The gross profit rate of the entrepreneurial venture is computed by
dividing the cost of goods sold by net sales.
8. The gross profit rate provides information on the cost ratio of
the business.
9. One of the objectives in evaluating the gross profit rate of the
business is to determine whether the amount of the gross profit is
sufficient to cover the operating expenses.
10. The operating profit margin rate indicates information on the
percentage of operating expenses to net sales.
11 The government is not interested in financial statements since it is
not a party to any of the transactions of the business.
12. The net profit margin rate presents the general perspective of the
operating performance of the business.
13. The amount of income per peso investment can be determined by
computing the net profit margin rate.
14. In a normal situation, it is favorable for the business to have
high inventory.
15. Preparation and presentation of the financial statements of the entity
is the primary responsibility of an accountant.
8. 4 CO_Q2_Entrepreneurship SHS
Module 8
What’s In
Let’s review what is revenue of the business. This is an important tool and
material needed in the operation of the business. It is said that revenue is the result
when sales exceed the cost to produce or manufacture goods/merchandise as well as
costs incurred in selling.
Forecast is advance information that could help us prepare and get ready for
any incoming event. Forecasting is the tool used in planning that aims to support
management or a business owner in his desire to adjust and cope with uncertainties of
the future. If anyone of us can predict that we can be rich, so it means all of us will be
rich. This fantasy is played out every day in boardrooms across the globe with the
practice of business forecasting.
It is important to have a good organization in the business to easily grow and
expand in the future.
What’s New
Activity 1
Read and understand the given problem.
Rodrigo is engaged in a buy – and – sell business of perfumes. He bought 10
boxes of perfumes. Each box costs P12,000.00 and contains a dozen of perfume
bottles. He is planning to sell one perfume bottle at P1,500. What is his expected profit
on the 10 boxes of perfumes?
Computation of Gross Profit
1
Lesson
9. 5 CO_Q2_Entrepreneurship SHS
Module 8
The ultimate goal of any business whether a retail or wholesale is to earn a
profit. Getting the difference between the amount of money earned from the selling 10
boxes containing a dozen of perfume bottles and the cost of those 10 boxes gives the
profit.
In the example that I gave, answer the following questions:
1. How much profit does Rodrigo earn?
2. Is it good to engage in a business like Rodrigo’s? Yes or No?
3. What do you think of Rodrigo’s business? Is it good for a beginner?
What Is It
Computing the Gross Profit
The profitability ratios are a group of financial statements that primarily
determine the profitability of the business operation.
The gross profit rate on a product is computed as:
Net Sales xxxxxxx
Less: Cost of Sales xxxxxxx
Gross Profit xxxxxxx
By using the formula, the gross of XYZ Trading in the year 2017
is as follows:
Net Sales P 734, 000.00
Less: Cost of Sales 577, 000.00
Gross Profit P 157,000.00
Profit is the gross income. The amount of gross profit provides information to
the entrepreneur about revenue earned from sales.
The term cost refers to the purchase price of the product including the total
outlay required in producing it.
10. 6 CO_Q2_Entrepreneurship SHS
Module 8
The gross profit margin is computed as follows:
Gross Profit Rate =
Gross Profit
Net Sales
The gross profit rate measures the percentage of gross profit to sales, indicating
the profit that the business realizes from the sale of the product.
The gross profit rate of XYZ Trading for the year 2017 is computed as follows:
gross profit rate =
46,900.00
734,000.00
The gross profit rate may signal to the entrepreneur that the amount of margin
on sales is 21.39%. This rate will be used to determine whether the amount of gross
profit can cover the operating of the business. Since the gross profit rate of XYZ
Trading is 21.39%, the cost ratio to sales will be 78.61%. This information will help the
entrepreneur in assessing whether the cost is too high or too low. Any product with a
very high cost will not become competitive in the market.
The gross profit rate will also help the entrepreneur set the selling price.
Operating Profit Margin Rate
The operating profit margin is the excess of gross profit from operating
expenses.
Gross Profit xxxxx
Less: Operating Expenses xxxxx
Operating Profit Margin xxxxx
The operating profit margin is the second level of revenue in the income
statement. At this stage, not only is the cost of buying or making the product that has
been deducted is included but also the operating expenses. These are expenses
incurred during a particular period only, and are not expected to provide benefits to
any future period. The operating expenses are also period costs.
In case there are no financing charges like interest, expenses, and income tax,
11. 7 CO_Q2_Entrepreneurship SHS
Module 8
the amount of the operating profit margin is equal to the net income.
Gross Profit P 157,000.00
Less: Operating Expenses 90,000.00
Operating Profit Margin P 67,000.00
This information states that the business realized an income of P 67,000.00
during the year after deducting the cost and operating expenses from the sales
made.
Operating Profit Margin
By applying
Operating Profit Margin Rate =
Operating Profit Margin Rate=
Net Sales
67,000.00
734,000.00
The operating profit margin of the business measures the percentage of profit
available after deducting the cost of sales and operating expenses of the business. A
higher operating profit margin is favorable to the business.
Net Profit Margin Rate
Operating Profit Margin
Add: Interest Income
xxxxxxx
xxxxxxx
Total
Less: Interest Expense xxxxxx
Income Tax
Net Profit margin
xxxxxx xxxxxx
xxxxxx
The income statement is the net profit margin and the third level in the revenue.
The business is only given consideration like interest expense and income tax.
Operating Profit Margin P67,000.00
Less: Income tax 20,000.00
Net Profit Margin P46,900.00
12. 8 CO_Q2_Entrepreneurship SHS
Module 8
The income statement of XYZ Trading does not reflect any data on interest
expense. Only income tax has been deducted from the operating profit
margin.
Net profit margin rate =
Net Profit
Net Sales
By applying the formula, the profit margin of XYZ
46,900.00
Net profit margin rate =
734,000.00
XYZ Trading appears to have earned 6.39% of its total sales of P734,000 during
the year. This profits rate must be compared with those of other similar businesses
within the industry.
Analyzing the Liquidity Status of the Business
Liquidity Ratios
Current Ratio = Current assets / Current Liabilities
Quick Ratio = (Current Assets – Inventories) / Current Liabilities
Current liabilities= (Cash and Equivalents + Marketable Securities + Accounts Receivable)
The quick ratio measures its short-term obligations with its most liquid assets
and therefore excludes inventories from its current assets.
. Financial statements are important in a company management as a means of
communicating past successes as well as future expectations. The financial statement
records all the operating results such as sales, expenses and profits or losses.
Return of Investment (ROI)
The Return of investment (ROI) measures the amount of net income per peso
invested to the business.
13. 9 CO_Q2_Entrepreneurship SHS
Module 8
The formula to compute ROI is as follows:
The average total asset is calculated by dividing the sum of the total assets at
the beginning and end of the period.
Table 1
Projected Five Year Balance Sheet
Fit Mo'to Ready to Wear Online Selling Business
Year 1 Year 2 Year 3 Year 4 Year 5
ASSET
Cash
337,398.56 686,417.05 1,052,886.47 1,437,679.36 1,841,711.89
Total Assets
337,398.56 686,417.05 1,052,886.47 1,437,679.36 1,841,711.89
Liability - - - - -
Owner’s
equity 337,398.56 686,417.05 1,052,886.47 1,437,679.36 1,841,711.89
Total
Liabilities
and Owner's
Equity 337,398.56 686,417.05 1,052,886.47 1,437,679.36 1,841,711.89
Table 1
Projected Five Year Income Statement
Fit Mo'to Ready to Wear Online Selling Business
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 1,545,673.95 1,622,957.64 1,704,105.53 1,789,310.80 1,878,776.34
Cost 1,213,275.38 1,273,939.15 1,337,636.11 1,404,517.91 1,474,743.81
Gross Profit
Before tax 332,398.56 349,018.49 366,469.42 384,792.89 404,032.53
14. 10 CO_Q2_Entrepreneurship SHS
Module 8
Yearly increase in revenue is assumed at 5%
Yearly increase in cost is assumed at 5%
As a future entrepreneur, one should always remember that nothing is
permanent in the field of entrepreneurship. What is applicable to one entrepreneur
may not be applicable to another. Certain things may happen to one entrepreneur but
may not happen to another.
Entrepreneurship should be practiced not as a science but as an art.Creativity
should always be applied by an entrepreneur through regularly evaluating the market
and the environment and responding to the changes in them.
The owner of an ordinary small business has the freedom to manage and
operate. Ideally, he/she prefers business activities which are done easily. However,
the entrepreneur has to perform the entrepreneurial activities correctly regardless of
whether they are undertaken easily or not. The importance in entrepreneurship is that
the business activities are performed correctly.
What’s More
Compute the Gross Profit
Answer the given problem.
1. Annie bought one dozen smartphones for P200,000.00 with a discount of 5%.
She sold half a dozen at a price of P18,000.00 per unit. However, a new model
of smartphones became available in the market, so she sold the remaining half
dozen @ P12,000.00 each unit. What was her profit or loss?
Compute the following requirements:
a. Gross profit rate
b. Operating profit margin rate
c. Net profit margin rate
d. Return on Investment
15. 11 CO_Q2_Entrepreneurship SHS
Module 8
Now ask yourself the following questions:
1. Is creativity present in the operation of ordinary small businesses along
the streets and highways and in your neighborhood? Why do you say
so?
2. Do you consider the business practices of small business owners a
form of entrepreneurship?
The profitability and ratios are a group financial statement ratios that primarily
determine the profitability of the business operation. They provide information on the
efficiency of resource utilization.
The gross profit represents the difference between net sales and cost of sales
of the entrepreneurial venture during a given period. It is computed as follows:
Net Sales xxxxxx
Less: Cost of Sales xxxxxx
Gross Profit xxxxxx
What I Have Learned
16. 12 CO_Q2_Entrepreneurship SHS
Module 8
By using the formula, the gross profit of XYZ Co., in the year 2017 is
computed as follows:
Net Sales P734,000.00
Less: Cost of Sales 577,000.00
Gross profit P 157,000.00
Profit is determined by:
the money you get from sales
the cost of stock – if you're selling a product
all the expenses you incurred
Income earned by the business are sales and gross profit.
Commissions, discounts, fixed expense are business expenses.
How to Increase your Sales
Improve profit by looking at the money you earn from sales, and increase:
o The number of customers
o The volume of goods or services existing customers to buy
o The sales price
o
What I Can Do
Conduct an interview of at least three (3) successful business people in your locality,
use the following questions as your guidelines:
1. What motivated him to start a business?
2. What is the nature of his/her business?
17. 13 CO_Q2_Entrepreneurship SHS
Module 8
3. How much capital was involved?
4. How many years has the business been existing?
5. Did he/she consider the population of the community?
6. How much gross profit did he/she earn for the first year of operation?
Assessment
How much did you understand the lessons in this module? Answer the following
questions.
Write True if the statement is correct and write False if you think the statement is not
correct.
1. The gross profit rate of the entrepreneurial venture is computed by
dividing the cost of goods sold by net sales.
2. The gross profit rate provides information on the cost ratio of the
business.
3. In evaluating the profitability of the entrepreneurial venture, the
evaluation must focus on the information reflected on the face of the
balance sheet.
18. 14 CO_Q2_Entrepreneurship SHS
Module 8
4. The operating profit margin rate indicates information on the
percentage of operating expenses on the net sales.
5. Mr. Q is a practicing Doctor of Medicine. During the month of March
2019, he received Professional Fees amounting to P 1,000,000 and
total expenses of P250,000. The net income of Mr. Q is P 750,000.
_________ 6. Profit is the money received from the customer in exchange of
products given to customer.
7. The gross profit rate of the entrepreneurial venture is computed by
dividing the cost of goods sold by net sales.
8. The gross profit rate provides information on the cost ratio of
the business.
9. One of the objectives in evaluating the gross profit rate of the
business is to determine whether the amount of the gross profit is
sufficient to cover the operating expenses.
10. The operating profit margin rate indicates information on the
percentage of operating expenses to net sales.
11 The government is not interested in financial statements since it is
not a party to any of the transactions of the business.
12. The net profit margin rate presents the general perspective of the
operating performance of the business.
13. The amount of income per peso investment can be determined by
computing the net profit margin rate.
14. In a normal situation, it is favorable for the business to have
high inventory.
15. Preparation and presentation of the financial statements of the entity
is the primary responsibility of an accountant.
19. 15 CO_Q2_Entrepreneurship SHS
Module 8
Additional Activities
After learning how to compute the gross profit, try solving the given problems
below:
1. A watch store owner decided to offer 20% discount for a particular brand of
watch that sells at P35,000.00. By doing so, his average sales increased from 5
watches to 12 watches a day. If he bought one watch at a price of P22,000.00
from the supplier, by how much was his daily profit increased or decreased by
offering such discount on the watch?
2. Michelle went to Baguio and bought 20 jars of strawberry jam for P3,500.00 with
15% discount. When she got back to Manila, she sold 10 of the jars for a total of
P1,800.00 and the rest as P185.00 each. How much profit did Michelle gain?
21. 17 CO_Q2_Entrepreneurship SHS
Module 8
References
BOOKS
Aduana, Nick L. Entrepreneurship in the Philippine Setting for Senior High School.
Quezon City. C & E Publishing, Inc. 2016.
Aduana, Nick L., Entrepreneurship in Philippine Setting for Senior High School,
2017, C&E publishing, Inc.p.46-51
Aduana, Nick L. "Chapter 5/Lesson 3 The Marketing Mix." In Entrepreneurship In
Philippine Setting For Senior High School, 184-199. Quezon City, Philippines: C&E
Publishing, 2016.
Banastao,C.,& Frias, S.(2008) Entrepreneurship .Quezon City Philippines: C &
E Publishing, Inc.
Batisan,Ronaldo S., Entrepreneurship: Diwa Senior High School Series, Diwa
Learning Systems Inc., p. 16-20
Batisan, Ronaldo S. Entrepreneurship Module, Diwa Senior Highschool Series, Diwa
Learning System Inc. Legaspi Village, Makati City Philippines, copyright 2016.
De Guzman, Angeles A., Entrepreneurship for Senior High School Applied
Subject ABM Strand,Lorimar Publishing,p.1-5
De Guzman, Angeles A., Entrepreneurship for Senior High School Applied
Subject ABM Strand,Lorimar Publishing,p.25-26
Habaradas, Raymund B., and Tereso S. Tullao,Jr., Pathways
to Entrepreneurship,2016,Phoenics publishing house,p.17-28
Lopez, Rafael Jr. Basic Accounting for Non-Accountants. 2015
Lopez, Rafael Jr. Fundamentals of Accounting. 2016
Lopez, Jr. Rafael M. Fundamentals of Accounting, 2014-2015 Edition
Morato Jr., Eduardo A., Entrepreneurship, 1st
ed., Manila, Philippines: REX
Books Store,p.13
Morato, Eduardo A. Entrepreneurship. Manila. Rex Bookstore, Inc. 2016.
Rabo, Tugas, and Salendrez, H.E. Fundamentals of Accountancy, Business and
Management. Vibal Group Inc. 2016
Teaching Guide for Senior High School, Fundamentals of Accountancy, Business, &
Management 1, CHED in collaboration with PNU
22. 18 CO_Q2_Entrepreneurship SHS
Module 8
Teaching Guide for Senior High School, Fundamentals of Accountancy, Business, &
Management 2, CHED in collaboration with PNU
Teaching Guide for Senior High School, Business Finance, CHED in collaboration with
PNU
ELECTRONIC RESOURCES
https://www.tutorialspoint.com/entrepreneurship_development/entrepreneurship_devel
opment
Business Dictionary. http://www.businessdictionary.com/defination/market-size.html
“Forecasting” Businessdictionary, Accessed December 10, 2018,
http://www.businessdictionary.com/definition/forecasting.html
“How to Make Revenue Forecasts” Smarta, Accessed December 10, 2018,
http://www.smarta.com/advice/business-planning/business-plans/how-to-make-
revenue-forecasts/
Katie Jensen, “Factors Considered in Financial Forecasting.” Chron. Hearst
Newspapers. Acessed December 10, 2018. https://smallbusiness.chron.com/factors-
considered-financial-forecasting-80716.html
https://www.slcbookkeeping.com/blog/bid/207078/Bookkeeping-Tasks-for-Every-Part-
of-the-year
https://www.thebalancesmb.com/steps-to-increase-small-business-profits-1200720
https://www.wikihow.com/Calculate-Profit
23. For inquiries or feedback, please write or call:
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Telefax: (632) 8634-1072; 8634-1054; 8631-4985
Email Address: blr.lrqad@deped.gov.ph * blr.lrpd@deped.gov.ph