BU121 Chapter Notes - Chapter 6: Gross Profit, Headcount, Cash Flow
Document Summary
Sales forecast: should be calculated first because volume of sales affects business expenditures. Gross margin (for product businesses: gross profit gross sales. Inventory turns (for businesses that hold inventory: frequency in which inventory turns over is an indication to the success of their marketing strategy and product mix. If one of these companies have a certain vacancy level and no one goes to them, they (cid:449)o(cid:374)"t (cid:271)reak-even or make a profit. Qualified leads (for internet businesses: users (cid:449)ho pro(cid:448)ide a(cid:272)ti(cid:448)ity a(cid:374)d respo(cid:374)se to the (cid:272)o(cid:373)pa(cid:374)y"s (cid:373)arketi(cid:374)g (cid:272)a(cid:373)paig(cid:374)s, different from viewers who are passive. Customer acquisition costs (cac: how much does it cost to acquire a customer, convert time to dollars, advertising, promotional expenses must be taken in to account. Average order size, time to reorder, lifetime value per customer: tracking what customer spends and how often projected potential lifetime value of customer, start-ups with no customers can use market research. Revenue per salesperson and time to revenue for direct sales.
