Financial Concepts Dictionary - Business Literacy
Below is a list of financial concepts with their definitions, examples, and a quote from our book Financial Intelligence. Use these financial concepts as a quick reference guide, a way to further your own education, or as a resource to train others.
Acronyms from the Income Statement - Business Literacy
Business Finance Training. Learn the basics of the financial statements and the story your numbers tell. BLI offers: Live Training. Ask questions and participate in discussions as our trainers teach you how to read and understand your financial statements and financial position.
Financing A Company - Business Literacy
Using the debt-to-equity ratio you can determine if a company is highly leveraged (using debt) to finance the company. This ratio also tells us which companies are risky for investors. Debt-to-equity ratio’s differ depending on the industry, be sure to compare with other businesses in the industry or industry standards.
Accounts Payable (A/P or AP) - Business Literacy
Accounts payable (A/P or AP), or trade payables, is money owed to others for products or services the company has purchased on credit. Accounts payable is a current liability since these debts are paid off in less than a year.. Sign up for our online financial statement training and get the balance sheet training you need.
Operating Profit Margin | Business Literacy Institute Financial ...
For example, if a company’s operating profit was $1,200 and its revenue was $12,000, then its operating profit margin is 10% (1,200 / 12,000).
Cost of Goods Sold & Cost of Services Financial Concepts
(Excerpts from Financial Intelligence, Chapter 8 – Costs and Expenses). If you suspect that rule [what goes into COGS/COS] is open to a ton of interpretation, you’re on the money. The accounting department has to make decisions about what to include in COGS or COS and what to put somewhere else.
Matching Principle in Finance - Business Literacy
The matching principle is a fundamental accounting rule for preparing an income statement.It simply states, “Match the sale with its associated costs to determine profits in a given period of time—usually a month, quarter, or year.”
Acquisitions and the Financial Statements | Business Literacy …
outflow of cash for acquisitions in the investing section of the cash flow statement, and a big cash inflow in the form of long term debt in the financing section of the cash flow statement.
Accruals in Financial Accounting - Business Literacy
(Excerpts from Financial Intelligence, Chapter 2 – Spotting Assumptions, Estimates, and Biases). Accountants use accruals and allocations to try to create an accurate picture of the business for the month. After all, it doesn’t help anybody if the financial reports don’t tell us how much it cost us to produce the products and services we sold last month.
Money Maps Cement Financial Statement Training - Business …
Financial concepts. The difference between cash and profit, the flow of the income statement, the money-making process, the sources and uses of cash, and the movement of investor dollars. Life cycles. Customer life cycle, a day in the life of an employee, and ongoing manager responsibilities. Business processes. The manufacturing process ...