LESSON 1 : PROFIT AND LOSS
● Gross Revenue
- The amount of money earned by a company from its usual business activities,
prior to the deduction of the costs.
- Calculated by multiplying the price at which the goods or services are sold by the
number of units or amount sold.
● Profit
- The difference between gross revenue and total cost, provided that the revenue is
greater than the cost.
- Amount of money left after all the costs and payable have been deducted from the
earnings generated.
FORMULAS
Unit Profit Unit Profit = Unit Price - Unit Cost
Profit Profit = Unit Profit x Quantity Sold
● Fixed Cost
- Includes utilities, labor, operating expenses and so on.
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● Loss
- Difference between the total cost and the generated revenue, provided that the
cost is greater than the revenue.
FORMULAS
Profit/Loss Profit/Loss = Revenue - Cost
Note: Profit if Revenue > Cost , Loss if Revenue < Cost
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● Breakeven
- If the total revenue generated is equal to the total cost incurred.
● Break Even point
- Number of items that needs to be sold to attain
FORMULAS
Breakeven Revenue = Cost (add x) (Find the x) (Unit)
LESSON 2 : SIMPLE AND COMPOUND INTEREST
● Simple Interest
- Interest calculated on the original principal only
- Set as a percentage of the principal and is multiplied by the amount of time
❖ P = principal amount
❖ R = Annual interest rate ( Interest rate per year )
❖ T = Number of years
❖ A = Accumulated Value
FORMULAS
Interest I = Prt
Accumulated A=P+1
Value A = P +Prt
Note : If walang given na year and MOST USED)
A = P (1+rt)
● Accumulated Value
- The sum of the principal amount and the amount of interest payable.
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● Compound Interest
- Earned every year is incorporated into the principal amount and itself earns
interest at the same rate
- Interest calculated in the principal and the interest earned from previous interest
periods
FORMULAS
Compound A = P (1 + r) ^2
Interest
Interest i= r / m
❖ Quarterly = 4
❖ Montly = 12
❖ Semiannually = 2
❖ Annually = 1
FORMULAS
Compound A = P (1 + r/m ) ^ mt
Interest
A (other) A = P (1 + i ) ^n
N N = mt
❖ M = number of times interest is compounded in a year , if not specified m =1
LESSON 3 : LOAN AMORTIZATION
● Loan Amortization
- Each payment is reduced by the amount of interest owed on the outstanding
balance
A. Interest payment
- Amount deducted from the payment
B. Principal repayment
- Remaining amount
1ST TABLE
TIME (YEARS PAYMENT INTEREST PRINCIPAL OUTSTANDING
AFTER LOAN) PAYMENT REPAYMENT BALANCE
➢ STEP 1 : Put the time ( 0 First ) then the payments
➢ STEP 2 : Interest payment = 1st Outstanding Balance x Interest Rate or the R/M (i)
➢ STEP 3 : Principal Repayment = Payment - Interest Payment
➢ STEP 4 : Outstanding Balance = Previous Outstanding Balance - Principal Repayment
2ND TABLE
PERIOD PAYMENT INTEREST PRINCIPAL OUTSTANDING
PAYMENT REPAYMENT BALANCE
𝑟 −𝑛
1−(1+ 𝑚 )
FORMULA : LOAN = K ( 𝑟 )
𝑚
➢ STEP 1 : Put the peiod ( 0 First )
➢ STEP 2 : Payment is the K
➢ STEP 2 : Interest payment = 1st Outstanding Balance x Interest Rate or the R/M (i)
➢ STEP 3 : Principal Repayment = Payment - Interest Payment
➢ STEP 4 : Outstanding Balance = Previous Outstanding Balance - Principal Repayment
LESSON 4 : SALARY, WAGE, INCOME, & BENEFIT
● Compensation
- Umbrella term for salaries and wages
- Remuneration in cash and in kind paid to employees at regular intervals for time
of work or work done
- Dependent on the nature, time, and location of work, among others
● Salary
- Earn at a fixed rate, quoted on a weekly, monthly, bimonthly, or an annual basis.
- The number of hours a salaried employee works per day does not affect his or her
salary.
● Wages
- Quoted on an hourly basis
- The amount a wage earner receives at the end of a period is the number of hours
worked multiplied by his hourly rate.
NOTES :
1. 8 hours per day of work
2. Overtime pay - more than the mandated number of hours per day
3. Rest period of at least 24 consecutive hours for every six consecutive days of normal
work
4. Incentive leave of at least five days with pay
5. Paternity and maternity leave
LESSON 5 : GROSS AND NET EARNINGS
● Gross Income
- The computed pay before the deduction of income tax and other deductibles
- Refers to income that is computed prior to any deductions such as social security
contributions, health insurance, contributions, and withholding taxes.
● Net Income
- A.K.A. take home pay
- The amount received by the employee after all taxes have been withheld and all
contributions have been deducted from the gross earnings
PERIOD EQUIVALENT PERIOD
12 Months
52 Weeks
1 YEAR
24 “Half-Months” (for semi-monthly payment)
26 “Two-week” periods (for biweekly payment)
DESCRIPTION NOTATION COMPUTATION
Monthly Salary S Monthly S annual/ 12
Semi Monthly Salary S Semi Monthly S annual/ 24 or S annual/ 2
Weekly Salary S Weekly S annual/ 52
Biweekly Salary S Biweekly S annual/ 26 or 2 x S weekly
● Regular pay or basic pay
- Compensation calculated by multiplying the number of hours worked by the
employee (not exceeding eight hours) by the applicable hourly rate
- Aka basic daily wage
LESSON 6 : HOLIDAY PAY AND PREMIUM PAY
● Holiday Pay
- Refers to compensation received by an employee for an unworked holiday
● Special Holidays
- Additional holidays declared by the government with the year
HOLIDAY DATE
New year Jan 1
Maundy Thursday VARIABLE
Good Friday VARIABLE
Araw ng Kagitingan April 9
Labor Day May 1
Independence day June 12
National Heroes Day Last Monday of August
Eid Ul Fitr VARIABLE
Bonifacio Day Nov 30
Christmas Dec 25
Rizal Dec 30
● Premium Pay
- Compensation received by an employee for performing work on special holidays
or on rest days
SPECIAL HOLIDAY DATE
All Saints Day Nov 1
Last Day of the Year Dec 31
EDSA people power anniv Feb 25
Ninoy Aquino Day Aug 21
LESSON 7 : OVERTIME PAY
● Overtime Pay
- Compensation received for additional work done beyond eight hours.
● Overtime rate
- Rate used in computing overtime pay
FORMULA
OVERTIME PAY 125%
REGULAR HOLIDAY 200%
SPECIAL HOLIDAY 130%
REST DAY 130%
REGULAR HOLIDAY WITH REST DAY 260%
SPECIAL HOLIDAY WITH REST DAY 150%