Cost, Revenue and Profit for Financial Goals
Businesses can use cost, revenue and profit objectives to set financial goals.
Revenue
- Businesses may consider revenue when setting their targets. Revenue is also known as sales revenue or turnover and can be calculated: quantity of goods sold x selling price per item.
Cost
- Businesses may consider cost when setting their targets. Total cost is calculated by adding together fixed costs and variable costs.
Cash flow
- Businesses may consider cash flow objectives when setting their targets. Cash flow compares cash inflows and cash outflows to ensure a business always has enough cash to meet its short-term debts.
Investment
- Businesses may consider investment objectives when setting their targets. Investment objectives cover the total expenditure planned by a business to develop capital projects
Capital structure
- Businesses may consider capital structure objectives when setting their targets. Capital structure targets focus on the proportion of capital received from different sources of finance.
