MCC Accountants Explains: Know Your Financial Terminology

Tax Consultant Salford

Getting to grips with terminology, especially in finance, can be confusing and complex, but educating yourself in the basics can help you massively. Whether you are training in accounting or running your own business, today we are going to be giving you our top advice by giving you some further insight into what you must know. Introducing, MCC Accountants Explains: Know Your Financial Terminology. Read on to find out more…

What Does Turnover Mean?

Turnover is a term used in the financial sector to refer to the total amount of sales made in a certain period of time, for example in one tax year or in one month. People can calculate turnover for new releases or just overall. Now, turnover is NOT to be confused with profit, these have a slight difference. Turnover is the total income of a business over a set period unlike profit where you calculate what is remaining once business expenses have been deducted.

What Does Break-Even Mean?

Break-even is a term that is used to describe the point where the total cost and total revenue are equal. It also means no loss or gain, everything is even, hence the term breaking even. The cost of a production is £100, and you have generated £100 of revenue, this would be an example of when you break-even.

What Does Forecasting Mean?

Forecasting simply means, planning and realistically estimating the future of your business, from the general business itself to a specific product, there are many ways that you can use forecasting to help you financially in business as it opens the opportunity for budgeting.

What Does Balance Sheet Mean?

Balance sheets. Another common term used in the financial sector. A balance sheet is simply a statement of all assets, liabilities, expenses, and any other important finances. A balance sheet is a priority as it is one of the crucial documents that is used to evaluate the progress and future of your business.

What Does Profit and Loss Mean?

And finally, profit and loss. Probably the most common term used in finance, but if you need a refresher course, keep on reading. Profit means once you have calculated your finances, the profit is the finances that exceed your expenses. For example, if you purchased something at 50p and you sold that item at £1.50, you have made £1 profit.

Loss on the other hand, is the opposite. This is when you do not make a profit, or you are breaking even. It means when you spend more money than what is coming in.

Here at MCC Accountants, we pride ourselves on being one of the leading accounting practices in the Northwest. With our team of highly skilled and reliable accountants, we can bring you a trustworthy 5-star experience. From the first initial call, you are our priority.

For more information about our Manchester-based accountancy services, please browse our website or feel free to give us a call. We are always happy to help!

Share:

Facebook
Twitter
WhatsApp
LinkedIn

Get a Quote

Social Media

Latest News

Get The Latest Updates

Subscribe to our
newsletter.

Categories

Highlights

Related Posts

Thank you for your enquiry

A member of our team will be in touch to arrange your free consultation or provide your no obligation quote as soon as possible.