QS.1 Quantitative skills in accounting key terms

Net Profit

The amount of money remaining after all expenses have been deducted from total revenue.

Cost of Goods Sold (COGS)

The direct costs attributable to the production of the goods sold by a company.

Variable Costs

Costs that vary directly with the level of production or sales.

Profit

The financial gain after all expenses have been deducted from total revenue.

Cash Flow

The total amount of money being transferred into and out of a business.

Investment Appraisal

The evaluation of the profitability and financial viability of an investment project.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent and salaries.

Variable Costs

Costs that vary directly with the level of production, such as raw materials and direct labor.

Liquidity

The ability of a company to meet its short-term financial obligations.

Profitability

A measure of the efficiency of a company in generating profit relative to its revenue.