Earnings and profits are often used interchangeably.
Earnigns represents the amount of money the company made
after paying taxes. There are two type of earnings,
EBIT and EBITDA .
Earnings Before Interest and Taxes
(EBIT): This is the difference between operating
revenue and operating expenses before taking out interest
and taxes.
Earnings Before Interest, Taxes,
Depreciation and Ammortization (EBITDA): This is the
difference between operating income and operating expenses
before taking out interest, taxes, depreciation and
ammortization.
Efficiency
In business efficiency means minimizing losses and
expenditures while maximizing profits. It is reducing
cost while increasing performance.
Equity represents the difference between liabilities and
assets. When the value of assets exceeds liabilities
this is called equity. It is also used to describe
ownership in stocks or other forms of securities.
Expenses or Expenditure are cost the company incurrs in
order to do business. These costs includes, rent,
office supplies, wages, raw material cost, marketing cost,
etc.
Fiscal Year is the 12 month period used for calculating
financial statements and filing corporate income tax
reports. Unlike the calendar year that begin on 1
January and ends on 31 December, the Fiscal year for most
corporations in the U.S. is from July to June. Each
company will determine their own fiscal year. The
federal government uses October to September as it's fiscal
year.
Fixed Assets are long term, tangible assets held for
business use and not expected to be converted to cash in the
current or upcoming fiscal year, such as manufacturing
equipment, real estate, and furniture. Source:
Investor Words
Fixed expenses are expenses that do not change as a function
of the activity of the business within a short timeframe.
They remain the same over time. Expenses such as
interest on a loan and rent is considered fixed. While
other cost such as electricity, administrative cost are not
fixed because they can change from month to month.
Forecasting is making predictions about future events.
Forecasting your business earnings is about making an
informed prediction about future earnings. The
foundation for forecastign is past performance. You
can start by using the company's past performance and make
some assumptions about how future events will impact what
happened in the past.
A Fulfillment Center is a site where purchased items are
packaged and shipped on behalf of a seller. Companies
provide fulfillment services whereby they maintain an
inventory of a seller's products and whenever a customer
purchases the item from the seller's website, the
fulfillment service company gets the order and package and
ships the item to the customer for a fee. The seller
pays the fulfillment service company the fee.
Businesses use fulfillment centers to save the cost of
warehousing and personnel.
Growth
Growth is the increasse in the business' revenues, sales or
income.
Globalization (Economic)
Globalization is the increasing interdependence between
economies. It is the increasing flow of goods and
services between countries. Through trade agreements
and lifting of tariffs and trade barriers companies are able
to more freely offer their goods and services to consumers
in other countries and provide opportunities for growth
amongst all participants.
A Holding Company is a company that owns enough voting stock
in another firm to control management and operations by
influencing or electing its board of directors.
Holding Companies are also called Parent Companies.
Source:
Investor Words
The overall general upward price movement of goods and
services in an economy (often caused by an increase in the
supply of money), usually as measured by the Consumer Price
Index and the Producer Price Index. Over time, as the cost
of goods and services increase, the value of a dollar is
going to fall becuase a person won't be able to purchase as
much with that dolar as he/she previously could.
Source:
Investor Words
An income statement shows the bottom line or net profit.
It shows whether or not a company made or lost money during
a specific period of time. It shows revenues minus expenses
and other costs.
A rate which is charged or paid for the use of money. An
interest rate is often expressed as an annual percentage of
the principal. It is calculated by dividing the amount of
interest by the amount of principal. Interest rates often
change as a result of inflation and Federal Reserve Board
policies. Source:
Investor Words
A company's merchandise, raw materials and finished and
unfinished products which have nto yet been sold. These are
considered liquid assets, since they can be converted into
cash quite easily. Source:
Investor Words
An invoice is a bill you issue to a customer for products
delivered or services rendered to the customer.
Invoices that are not paid become accounts receivables.
