…………………….GLOSSARY OF BUSINESS TERMS…………………….
Commoditized Industry: An industry where many businesses compete so that no one business rules the industry.
Fixed Costs: Business expenses that have nothing to do with a business’ product or service.
Gross Margins: This is the percentage of sales left after subtracting the cost of goods sold. It can be expressed in the following equation: Gross margin = (Revenue – Cost of Goods Sold) / Revenue.
Net Margins: The ratio of net profits to revenue. It can be found by dividing earnings before interest and tax by revenue.
Net Profits: This is the bottomline or net income of a company. Net profit is equal to the gross profit minus overheads minus interest payable for a given time period.
Revenue: The income a business receives.
Switch Cost: What it costs for a customer to switch companies.