The objective of this website is to help you do the following:
Distinguish between
effieciency
and
effectiveness
Define
profit
vs.
profitability
Compare
entrepreneurial
profit and accounting profit
Explain the effect
profit margin
and
asset turnover
have on the earning power of a company
Understand the use of leverage and its relationship to profitability and loss
Be able to distinguish between Chapter Seven and Chapter Eleven bankruptcy
Calculate the break-even point and communication margin using variable costs, fixed costs, and, revenue of a business
Q:
Why do we need to know this information?
A:
By understanding these concepts, you should be able to confidently answer questions that a potential lender/investor may ask.
Such as:
What profit do you expect to obtain?
How profitable will your firm be?
How profitable is your firm now?
What is your break-even point?
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