Selling Price & Profit Margin
The amount a business pays to make or obtain a product, or to perform a service.
What is cost price?
This financial report shows a company’s assets, liabilities, and equity for a specific period.
What is a balance sheet?
This analysis helps a business understand how much cash it generates and spends over a specific period.
What is cash flow analysis?
These costs remain the same no matter the volume of production.
What are fixed costs?
This funding method uses the business owner’s own savings.
What is bootstrapping?
The net profit a company wants to make from a sale, usually represented as a percentage.
What is profit margin?
This is the owner’s remaining value after liabilities have been deducted from assets.
What is equity?
This measure identifies the amount of cash a company is spending every month.
What is burn rate?
These costs fluctuate depending on production.
What are variable costs?
These investors are wealthy individuals who typically fund a business in exchange for an equity stake.
Who are angel investors?
Ben’s running shoes cost $18 per pair to manufacture. He wants a 20% profit margin. Using the lesson’s formula, what selling price should he set?
What is $21.60 per pair?
Mallory’s auto repair shop has $12,000 in cash and $8,000 in inventory. It owes $4,000 on a credit card and $3,500 in long-term debt. What is Mallory’s equity?
What is $12,500?
A company starts the month with $6,200 and ends with $4,900. Using the lesson’s burn-rate calculation, what is its burn rate?
What is $1,300?
Gary’s restaurant buys takeaway boxes and pays rent. Which cost is variable, and which is fixed?
What are takeaway boxes as a variable cost and rent as a fixed cost?
A business shares its startup idea on an online platform and pre-sells products to raise capital. What funding method is this?
What is crowdfunding?
A restaurant dish costs $6.75 to make. The owner wants a 33% profit margin. Using the lesson’s formula, what is the selling price, rounded to the nearest cent?
What is $8.98?
Mallory has income of $3,800, cost of goods of $875, and total expenses of $1,400. What are her gross income and net income?
What are $2,925 gross income and $1,525 net income?
A business has a beginning cash balance of $5,600, cash sales of $21,800, and costs of $4,700 for utilities, $3,400 for loan payments, and $1,200 for marketing. What is its ending cash balance?
What is $18,100?
Gary’s restaurant pays for ingredients and a credit card bill. According to the worksheet classification, which is variable and which is fixed?
What are ingredients as a variable cost and the credit card bill as a variable cost?
This budget projects revenues and expenses for a specified period and helps a business plan the funds it needs to operate efficiently.
What is an operating budget?
A candle costs $8.46 to manufacture. The owner wants a 52% profit margin. Calculate the selling price, rounded to the nearest cent.
What is $12.86?
Gabe sells cups of candied nuts for $6 each, and his monthly costs are $810. How many cups must he sell to break even?
What is 135 cups?
A food truck earns $4,700 in revenue each month. What is its annual run rate? Also, if its starting balance was $3,400 and ending balance was $5,300, what was its burn rate using the lesson’s calculation?
What are a $56,400 run rate and a negative $1,900 burn rate?
Bryan’s clothing store pays for insurance, internet, clothes, and employees’ salaries. According to the worksheet classification, which cost is variable?
What are the clothes?
A small business applies for an SBA loan. Explain how the SBA can make it easier for the business to get a loan, and name one difference between an SBA loan and an SBA grant.
What is reducing lenders’ risk; an SBA loan must be repaid with interest, while an SBA grant does not need to be repaid?