Finance - Financial statements - Income statement
7 important questions on Finance - Financial statements - Income statement
Why is it important to maintain revenue streams?
What are the cost of good sold (COGS)/direct costs?
Examples
- Raw material
- Direct labor
- Packaging
- Advertising
What are the operating costs (indirect costs), give the 3 categories?
- Sales and marketing
- General and administrative
- Research and development
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How do companies lower their operational costs?
- (Re)organize sales via the internet
- Simplify organizational systems
Why does the value of a fixed asset diminshes every year?
- Through use
- Newer technologies that are cheaper and faster
- Maintenance cost increase
What are fixed costs?
- Investments in facilities
- Equipment
- Basic organizations
What are the 2 pricing mechanisms?
- Fixed prices (predefined based on static variables: list prices, prices depending on the number or quality of a product)
- Dynamic prices (defined by negotiation or depend on demand and supply)
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