The Ultimate Business Course: Section A: Conventional Business Terminology Part Eight

Conventional Finance Terminology (Part 8)

This is part eight of the business course. Make sure that you understand the terminology here well.

Liabilities

Liabilities are long term loans of the type used to finance the business and short term debts or money owing as a result of trading activities to date.

Liquidity ratio

Indicates the company’s ability to pay its short term debts , by measuring the relationships between current assets against the short-term debt value .Also referred to as the Current Ratio.

Net Assets (also called total net assets)

Total assets (fixed and current) less current liabilities and long-term liabilities that have not been capitalized (eg, short-term loans)

Net current assets

Current assets less Current Liabilities.

Net Profit

Net profit normally refers to profit after deduction of all operating expenses, notably after deduction of fixed costs or fixed overheads. This contrasts with the term ‘gross profit’ which normally refers to the difference between sales and direct cost of product or service sold.

Opening/closing stock

See explanation under Cost of Sales.

Technorati Tags: Business Online

Vote Result

Score: 0.0, Votes: 0