Category 1
Total revenue equals total costs, meaning the business is not making a profit or a loss.
What is Break-even point?
A bakery calculating how many cakes it must sell to cover expenses.
What is Break-even Point?
Funds used by a business to acquire, upgrade, or maintain physical assets such as equipment or technology.
What is Capital Expenditures?
A restaurant purchasing new kitchen appliances.
What is Capital Expenditures?
A strategy that determines the selling price by adding a markup to the cost of producing a product or service.
What is Cost-Based Pricing?
A manufacturer pricing a product by adding a 20% profit margin.
What is Cost-Based Pricing?
Business expenses that remain constant regardless of production levels, such as rent and salaries.
What is Fixed Cost?
A retail store paying the same rent each month.
What is Fixed Cost?
The revenue remaining after deducting the cost of goods sold but before subtracting operating expenses.
What is Gross Profit?
A company earning $100,000 in sales with $40,000 in COGS has a gross profit of $60,000.
What is Gross Profit?
The costs required to run a business, excluding direct costs of production, such as utilities and marketing.
What is Operating Expenses?
A company spending money on advertising and office supplies.
What is Operating Expenses?
Strategy where prices are set based on the perceived value to customers rather than
What is Price Based Pricing?
A luxury brand charging premium prices due to brand perception.
What is Price Based Pricing?
Expenses that have both fixed and variable components, such as utility bills.
What is Semi-Variable Cost?
A business paying a base charge plus additional costs based on usage.
What is a Semi-Variable Cost?
Costs that fluctuate based on production levels, such as raw materials and direct labor.
What is Variable Cost?
A clothing company spending more on fabric as production increases.
What is Variable Cost?
Leaving a stable job to start a new business.
What is Career Risk?
Entrepreneurs facing burnout from long working hours.
What is Emotional Risk?
A company expanding too quickly without proper planning.
What is Management/Decision Risk?
A startup running out of funds before becoming profitable.
What is Financial Risk?
A smartphone company recalling defective devices.
What is Product Risk?
A fashion brand losing sales due to changing trends.
What is Market Risk?
The rise of streaming services disrupting the cable TV.
What is Industry Risk?