Math is my business: Week 1

Hey guys! I hope you enjoy keeping track of my blog.
On our first day of taking up lessons from Sir. Paner, I've learned a lot already!

He asked us to do this blog because it has a really good purpose:
He wants us to develop our writing skills. "If you want to succeed in that, you have to develop that". At the end of the semester, there's also money. Some people just write a blog just for the sake of doing it (I'm pretty guilty of that but hey! it doesn't hurt to try something new right?)

He also discussed our very exciting class syllabus.
"Business Math is about computations involved in business" - I'm looking forward to learning more about that because I plan on being an entrepreneur during and after college. This subject will help a lot.

He also gave us tips on how to succeed/Pass the class:
First of all, we should always:
-come to class on time
-Review regularly
-Don't cram the night before the exam.
-Form a study group
-Have a lot of studying materials.

and ended it with a quote:
"You cannot reach a mile if you don't start with one step. By doing it, you're already starting."

Then later proceeded with the actual lesson:
It's all about Profit and loss.

What is Profit and loss? it's the amount which the sales are greater than the cost of goods sold and the operating expenses. Margin also means gain or profit.

Definition of terms:

• Gross sales - the actual amount received for selling the goods
• Refunds - amounts returned usually if goods are defective
• Net Sales - obtained when refunds are being deducted from the gross sales
• Cost of goods sold/ buying price - the amount paid for articles bought including the buying expenses.
• Inventory - an itemized list of goods on hand
• Gross Profit - the difference between the net sales and cost of goods sold.
• Operating expenses - selling expenses such as salaries or wages, travelling expenses, rentals, water, electric       bills, commissions, taxes.


Here are the formulas in computing Profit. It's very simple:
Gross sales - Refunds and allowances = Net sales
Net sales - Cost of goods sold/buying price = Gross Profit
Gross profit - Operating expenses = Net profit


Here are the formulas in computing for the Cost of Goods for a period of time. It's very simple:
Beginning Inventory + Purchases = Goods for sale
Goods for sale - Ending Inventory = Cost of Goods sold. 


In case sales are less than the cost of goods sold, there is a loss. The formula computing losses are as follows:
Cost of Goods sold - Net Sales = Gross loss
Gross loss - Operating expenses = Net loss


You see how simple, fun and helpful it is to learn these? watch out for my next post and learn more business related lessons!
xo

Checked by: Prof. Crisencio Paner