Managing for financial sustainability

Profit is defined as the financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.

• Loss

• Revenue

• Profit

• Expense

Financial services providers generate income by:

• Charging fees for services

• Offering free services

• Providing free financial advice

• Donating to charity

Financial services providers spend their money on various aspects of managing business finances. Which of the following is a common expenditure for financial services providers?

• Employee salaries

• Office supplies

• Marketing and advertising

• All of the above

What is the formula to calculate profit?

• A) Income + Costs

• B) Income - Costs

• C) Costs - Income

Based on the example of 'Cakes For All Seasons', what was the profit last year?

• $10,000

• $20,000

• $30,000

• $40,000

What are the two separate transactions that create different flows of interest for financial service providers?

• Loan and Deposit

• Investment and Insurance

• Credit and Debit

• Mortgage and Lease

What is 'net interest income'?

• The total interest earned by a bank

• The difference between interest earned and interest paid

• The total interest paid by a bank

• The interest earned on savings accounts

Based on the financial statement example, calculate the net interest income if the interest receivable is £10,000m and the interest payable is £2,000m.

• £8,000m

• £12,000m

• £2,000m

• £10,000m

Which of the following is NOT a source of non-interest income for financial services providers?

• A) Trading activities

• B) Investment income

• C) Interest receivable

• D) Fees and commissions

True or False: Investment banks are involved in trading activities and can generate significant income, although there are often high risks involved.

• True

• False