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Improving Business Profitability
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Improving Business Profitability
📊 Part 1: Understanding Profitability
1. Complete the profit formula:
Profit = _____________ - _____________
2. Which of the following best defines profitability?
The total amount of money a business makes
A business's ability to generate profit relative to its revenue or investment
The difference between selling price and cost price
The amount of cash a business has in the bank
3. Tick all the ways a business can improve profitability:
Increase selling prices
Reduce operating costs
Increase sales volume
Hire more employees
Find cheaper suppliers
🧮 Part 2: Calculating Profit
4. Sunny's Café has the following data for last month:
Revenue: £8,500
Costs: £6,200
Calculate the profit: £ ___________
5. If Sunny increases prices by 10%, what would the new revenue be?
New revenue: £ ___________
6. If Sunny reduces costs by £500, what would be the new profit with the original revenue?
New profit: £ ___________
💡 Part 3: Strategy Evaluation
7. Choose the BEST strategy for Sunny's Café to improve profitability:
Increase prices by 15%
Reduce costs by finding cheaper ingredients
Offer loyalty cards to increase customer visits
Extend opening hours to increase sales volume
8. Explain your choice from question 7. Consider both advantages and potential risks:
9. Evaluate why improving profitability is crucial for business survival:
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