Accounting

Need to Know

At the end of this section the student should be able to:

Explain the identify the various elements of a P&L account
- Gross Profit
- Expenses
- Net Profit
A student should be able to explain the importance of a P&L account to a business
Explain the identify the various elements of a balance sheet
- Fixed Assets
- Current Assets
- Current Liabilities
- Working Capital
- Capital Employed
Explain the importance of a balance sheet to a business
Identify three profitability ratios
Recall the formula for Gross Profit Percentage and explain its use
Calculate Gross Profit Percentage, interpret the meaning of the formula and suggest ways a business might improve their performance
Recall the formula for Net Profit Percentage and explain its use
Calculate Net Profit Percentage, interpret the meaning of the formula and suggest ways a business might improve their performance
List the element of “Capital Employed”
Recall the formula for Return on Investment and explain its use