You can follow the finance words in a Business case without studying Accounting. You need five terms and one rule: write what the money did, not only its name.
This page is part of SPM Business. The full list of terms is in the Business glossary.
What do the five money terms mean?
Each term answers a different question about a business.
| Term | Question it answers | Malay |
|---|---|---|
| Revenue | How much did customers pay for what we sold? | hasil, jualan |
| Cost | How much did we spend to make and sell it? | kos |
| Profit | What is left after costs? | untung |
| Cash | How much money has actually moved in or out? | tunai |
| Capital | What money or assets did the owner put in to start? | modal |
Learn the English and Malay names together, because a question may use either.
How do they work in one small case?
Kedai Roti Mawar sells 400 loaves a month at RM6 each. Ingredients cost RM900. Rent and wages cost RM1 000.
Revenue is 400 × RM6 = RM2 400. Total cost is RM900 + RM1 000 = RM1 900. Profit is RM2 400 − RM1 900 = RM500.
A strong sentence reads: “Kedai Roti Mawar made RM500 profit because its revenue of RM2 400 was higher than its costs of RM1 900.”
Why can profit and cash tell different stories?
Profit counts a sale when it happens. Cash counts money only when it moves.
Suppose a cafe customer takes RM600 of loaves and promises to pay next month. Cash received is RM2 400 − RM600 = RM1 800. Cash paid out is RM1 900. Cash for the month is RM1 800 − RM1 900 = −RM100, even though profit is still RM500.
This is why a case may say a business is profitable but cannot pay its supplier. The word to use is cash flow, and the lesson is on interpreting cash flow forecasts.
Where do students slip?
Three slips cost marks in finance questions.
- Calling revenue “profit”, so a large sales figure is treated as a large gain.
- Forgetting that wages and rent are costs, not only ingredients.
- Writing the number with no meaning, such as “profit is RM500” with no reason.
Fix each by asking, “What did the money do to the business?” and finishing the sentence with that effect.
What can you practise on your own?
Invent a small business and write five lines: its revenue, its costs, its profit, one late payment and the cash that results. Then explain the gap between profit and cash in two sentences.
Use the business case answer planner to structure a written answer, and keep track of slips with the mistake log.
When might one-to-one lessons help?
They help when the terms are known but you freeze in a timed paper, or when English finance vocabulary is the barrier. A teacher can listen to you explain a case aloud and correct the word you keep swapping. See online one-to-one Business tuition.