1. Factors that Makeup Prices
Analyzing Revenues, Costs, & Expenses

2. What is Price?
Price is the value of money placed on a good or service.
-Important factor that helps establish and maintain a firm’s image, competitive edge, and profits.

3. Factors that must be addressed in a price
Cost of Goods – Amount to purchase or produce goods to be sold
Overhead Expenses – Costs of operating a business.
Profit – Amount of money left over after costs and expenses are paid.

4. Revenue Any money that is generated and flows into a business.
Most money in a business is generated through sales revenue
Price determines how much sales revenue is generated

5. Examples of Non-Sales Revenues in Sports Marketing
Sponsorship Revenues
Licensing Revenues
Interest Earned

6. Costs & Expenses
Any money paid by a company to operate and maintain the business.
Dollars that flow out of a business

7. Basic Business Formula
Revenue – Costs & Expenses =
Net Profit or Loss

8. Income Statement
A financial statement that lists a company’s revenue & expenses to determine net profit or loss over a period of time. (Referred to as a company’s bottom line)

9. Break-even Point
Revenue = Costs & Expenses

10. Markup or Margin
The amount of profit added to costs or breakeven point.
Price – Costs(B.E.P) = Markup(profit)

11. Markup is usually expressed as a percentage.
Basic Pricing Formula
Costs + Markup = Price
Markup is usually expressed as a percentage.

12. Other factors Affecting Price
Competition
Quality/Image
Supply & Demand
Channels of Distribution
Promotional Discounts
Seasonal Discounts

13. The Main Goal of all Businesses
Revenue > Costs & Expenses