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

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Presentation on theme: "Lets think…! Discuss… How can a business make money? = 5mins."— Presentation transcript:

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

2 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)

3 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 ?

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

5 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

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

7 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

8 Task 1 Calculate the revenue for the following businesses: 1) 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.

9 Task 2 Cost & Revenue Hangman eBusiness/Activities/Hangman/Finance/Cost s/hangman.html

10 Task 3 Frankie Gerard wants to set up his own salon. In anticipation of a meeting with his bank manager, Frankie arranges a meeting with you (his Financial Consultant) as he is unsure about the different types of revenue he can expect to receive through the new salon. Your task is to prepare some meeting notes in preparation for your meeting with Frankie. Your notes should include: -A definition of revenue -The different ways Frankie will generate most of his revenue -The formula for calculating revenue

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