O'Reilly logo

The Finance Book by Si Hussain, Stuart Warner

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

33 Profit planning

‘Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.’

Wilkins Micawber, fictional character created by Charles Dickens, author

In a nutshell

Businesses undertake ‘profit planning’ to calculate forecast profits for different products and services.

Profit planning requires an understanding of variable and fixed costs as well as the concept of ‘contribution’.

By using simple ratios businesses can calculate target profits and their sensitivity to the breakeven sales revenue.

Need to know

This chapter will cover the following three elements of profit planning:

  1. Cost classification.
  2. The ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required