# Lets think…! Discuss… How can a business make money? = 5mins.

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Lets think…! Discuss… How can a business make money? = 5mins

TOPIC TITLE:Topic 5: Operations Management LESSON TITLE:Revenue COMPETENCY FOCUS: Key Skills (L5): you will be able to develop your numeracy skills to calculate financial transactions of a business and to interpret financial data. Learning Objectives By the end of the lesson, you should be able to… LO1) To identify the different sources of revenue for a business (Gui-Reg) LO2) To calculate total revenue using the correct formulae (Reg-Str) LO3) To analyse the importance of revenue for a business (Adv)

Revenue Revenue can come from more than one source. The table below shows the revenue received by Manchester Utd year ended 30 June 2008. Source£ (000) Gate receipts (Premier League)55,274 Gate receipts (cup matches)27,000 Sponsorship/corporate hospitality60,000 Media/broadcasting40,329 Merchandising18,080 Other8,235 TOTAL ?

Revenue Revenue = the total amount of money received from selling goods/services. Sometimes known as turnover or sales revenue.

Sources of Revenue Revenue is the money coming in to the business. It is also referred to as income. A business revenue can come from: Sales of goods and services Leasing a part of the building to another person who pays you rent Interest from savings in a bank account

Calculating Revenue Revenue is calculated by multiplying the amount of goods sold by the price it is sold for. Revenue = quantity x price

Calculating Revenue Revenue = quantity x price For example: if West Bromwich Albion sold 100 season tickets for their South Stand at £798 each; that would be Revenue = 100 x £798 Revenue = £79,800

Task 1 Calculate the revenue for the following businesses: 1)Sofa.com sells 640 sofas at an average price of £740 each. 2)Sandra, a mobile hairdresser, styles 35 peoples hair, charging them £30 each. 3)Hull city FC sells 100 adult season tickets for £450 each, 20 family season tickets for its west stand at £410 each, 2,500 adult south end tickets at £400 each and 50 child season tickets at £410 each.