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GCSE Business · key term
The amount by which total costs exceed revenue.
Used by AQA, Edexcel and OCR
Paper 1, Paper 2
Revise: Costs, Revenue and Profit CalculationsA negative result from the profit calculation shows the size of that loss. If revenue exactly equals total costs, the business makes neither a profit nor a loss.
Specification 1.3.2 · Paper 1
If revenue minus total costs is negative, identify the result as a loss and state its size.
When reading profit or loss, compare revenue and total costs at the same output level.
Label a negative profit calculation as a loss. Do not confuse the horizontal margin of safety with the vertical profit gap.
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The amount by which a business’s total costs exceed its revenue over a period.
Revise: Revenues, Costs, and ProfitsComparing sales income with these costs reveals whether trading produces a profit or a loss.
Paper 2
The amount by which total costs exceed total revenue over a period of time.
Revise: Importance of Financial ConceptsA business can have high revenue but still make a loss if its costs are even higher. Similarly, revenue can increase without profit increasing: the business may spend more on staff, materials or advertising to achieve those extra sales.
A financial result in which a business's total costs exceed its total revenue over a period.