Through our customised financial training, we help leaders and managers find their financial voice, helping make more informed financial decisions and ultimately helping improve the profitability of the organisations they serve.
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An account used to show what it cost to produce the finished goods made by a manufacturing business.
XA method of costing where Variable Costs are allocated to products or services to calculate each product or service’s Contribution to total fixed costs.
Unlike absorption costing, no attempt is made to allocate fixed costs back to each product or service.
The amount by which the cost price is increased to set the sales price.
Mark up is usually expressed as a percentage.
So if goods costing $50 were marked up by 100%, then their sales price would be $100.
The total number of listed issued shares in a company, multiplied by the share price.
A ‘quick and dirty’ method of putting a value on a company.
A method of matching income and expenses to a certain period.
So comparing income earned in a say 12 months, against the costs incurred in that same period, to calculate the profit or loss.
The (usually projected) value of an intangible asset on the date it becomes due.
Another term for Net Profit.
The price less any tax. E.g. if you sold some goods for $22 inclusive of $2 GST, then the ‘net of tax’ price would be $20.
A set of accounts held in the nominal ledger.
They are termed ‘nominal’ because they don’t usually relate to an individual person.
The accounts which make up a Profit and Loss account are nominal accounts (as is the Profit and Loss account itself), whereas an account opened for a specific customer is usually held in a subsidiary ledger (the sales ledger in this case) and these are referred to as personal accounts.
A ledger which holds all the nominal accounts of a business.
Where the business uses a subsidiary ledger like the sales ledger to hold customer details, the nominal ledger will usually include a control account to show the total balance of the subsidiary ledger (a control account can be termed ‘nominal’ because it doesn’t relate to a specific person).
Net Operating Profit After Tax – sometimes shortened to Net Profit.
This is the final profit after all expenses, interest and tax have been deducted.
It is therefore the amount that the shareholders have earned.
Often also referred to as ‘Net income’.
Net tangible asset backing per share (in cents).
The theoretical value of net assets attributable to each ordinary share on issue, calculated by dividing shareholders’ funds (net of minority interests, intangible assets and preference shares) by the number of ordinary shares on issue.
Every time a business closes the books for a year, it opens a new set.
The new set of books will be empty; therefore the balances from the last balance sheet must be copied into them (via journal entries) so that the business is ready to start the new year.
Revenue or Income less Expenses i.e. Profit or Loss.
Shortened form of Operating Expenditure – similar to Operating Costs/Expenses/Overheadsand are charged to the Profit and Loss Account in the period they are incurred.
This is a type of share issued by a limited company.
It carries the highest risk but usually attracts the highest rewards.
Most ordinary shares carry voting rights.
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Through our customised financial training, we help leaders and managers find their financial voice, helping make more informed financial decisions and ultimately helping improve the profitability of the organisations they serve.