Accounting Terms for Financial Business Literacy

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How Do You Calculate Net Profit Margin?

Net profit margin is computed by dividing the net profit by the revenue, and then multiplying it by 100. It is a percentage that indicates a company’s profitability. A 20% net profit margin means that for every dollar in revenue, there is a $0.20 in clean profit. The higher the net profit margin, the better.  …

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How to Double Net Profit Margin?

The net profit margin, also referred to as the Net Margin, is a profitability metric used in corporate finance that’s considered as the most comprehensive evaluative ratio. It reflects a business’s ability to turn its revenue into profit after accounting for all their day-to-day expenses, including taxes and debts. In order to compute a business’s …

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What Is A Realised Gain?

Investors and business persons are more than familiar with the concept of gains and losses. In the business and financial industry, these terms are not just empty words. They are associated with assets, stocks, and cash that are worth millions of pounds, some even billions. To start understanding them, let us first define what gains …

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Dividend Tax – Do You Have To Pay Tax On Dividends?

If you happen to come upon an Investing 101 book for shareholders, you will surely find “invest in dividends” as one of the top pieces of advice. There is a reason why long-term, income investors love to collect dividend stock in their portfolio so you have to pay dividend tax. It is more than just …

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How Do I Track My Expenses?

One of the most important sectors of any business is its financial aspects. Almost all business decisions revolve around a company’s finances, making it a critical facet of any venture. Managing your finances might be a messy feat, but it is vital if you want to keep your company above the water.   Handling the …

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What Is An Unrealised Gain?

When it comes to measuring your financial performance, there is nothing more accurate than a financial statement. Financial statements are the holy grail for companies because it provides a proper evaluation of a business’s overall value. It gives valuable data regarding a company’s profitability and summarises a business’s total revenue and expenses over a specified …

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What is a Good Profit Margin?

The profit margin is a financial tool that helps you assess how your business’s bottom line is doing. Generally speaking, a higher profit margin means that your business is doing well. However, what a “good” profit margin depends on a variety of factors. Calculating your profit margin is just the first step. Once you have the number, …

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What Does Net Profit Margin Mean?

Net profit margin is a ratio or percentage that indicates a company’s profitability. A high net profit margin means that a company is selling well while efficiently covering its costs, while a low net profit margin means that it is not selling well and/or is not able to have a cost-efficient operation. Net profit margin …

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What Is Invoice Financing?

Invoice financing is a term that you will always encounter in almost every business. This process involves using your accounts receivable as collateral for your loans.  The Invoice Financing It can also refer to borrowing money from the account, as mentioned earlier. There are specific nuances from these functions, though, as it can still get …

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What Is Factoring?

Every business, even profitable ones, encounter different hurdles before attaining the sweet peak of success. Some stores may run into customer relations problems. Some may experience intense business competition. But most ventures, one way or another, will come up against financial and funding struggles along their business journey and there is also factoring. Whether it …

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