Word lists & Notes

Using accounting to increase profits


variable costs

gross profits

fixed costs=labor costs + other fixed costs


gross profit margin, labor share


The vertical line shows sales and the horizontal one just a space.

 how to calculate depreciation in this case

You have two types of expenses. One of them is a variable cost, and the other is a fixed cost.

 I would like to talk to you about the overall picture of how money flows through a company. There is a diagram of this in your workbook.

Please try to memorize this diagram.

A variable cost is a cost connected with sales, which sometimes increases and sometimes decreases. Can you think of anything that falls into this category?

One example is raw materials. Or buying stock. Anything else? Of course, it’s different for each industry.

In other words, costs that increase and decrease depending on sales are called “Variable costs”.

in the accounting period. Fiscal year. Financial year.

When it comes to fixed costs, they tend to increase when you leave them as they are. You should check them regularly such as once a year.

I’d like to talk about "Using accounting to increase profit.

First, "Picture the make up of profits".

Second, "catch the relationship between profit and money".

Finally, "Strategize to increase profits".

Statement of cash flows

Cash flows from operating activities

Cash flows from investing activities

Cash flow from financing activities