Key Financial Terms
So let's go over a few key financial terms that we've mentioned in today's course. So first thing is profit margin, right, This is literally the percentage of um the percentage that kind of tells you how much how much your business is making on each product or service that you are selling. All right? So to determine your profit margin, you essentially want to take your net income divided by your net sales. Alright? So your net income is literally the amount of money that you make minus all of your expenses, Okay? And then you get your net income. So to get profit margin, you take your net income divided by your net sales, okay? The amount of money that you sail Of this product and multiply that by 100 and you will get your profit margin okay? The higher the profit margin, obviously the better. Next let's talk about gross sales. What is gross sales? So gross sales is truly just that gross number, that large number what you're actually selling. So if you go out today and you sell Um, you...
know, x amount of sandwiches and it equates to $5,000, that gross sales, That number is literally your gross sales. This is the amount of sales that you produced without taking into account any expenses or any other things that go into helping you to produce this profit. So if all of this is seeming a little bit overwhelming and you feel like you need just a complete, maybe business makeover or business finance refresher to get a good idea of where you are currently with your business and personal finances and where you need to go from there. Check out my previous course with Creative Live that takes you step by step on how to get a good grasp on your business finances and what you need to do to get them on track.