Accounts Flashcards
revenue
income/turnover/sales/the top line
cost of goods sold
(=direct loss) includes manufacturing costs, salaries of manual (=blue collars) workers etc.
operating expenses
(=indirect costs/overhead) include salaries of sales and office staff, marketing costs, utiliti bills etc.
non-operating income
includes profits from investments in other companies
EBITDA
stands for Earnings Before Interest, Tax, Depreciacion and Amortization
Earnings
=profit/the bottom line
Depreciacion and Amortization
are very similar, and are often used in the same way. However, ‘depreciation’ can refer to the loss in value of a tangible asset and ‘amortization’ to the loss in value of an intangible asset. This loss over time is treated as a cost and written off (= subtracted from the profit) over several years.
Interest
refers to money paid to the bank for loans (or received from the bank for cash balances)
Dividends
is money paid to shareholders
Retained profit
is transferred to the Balance Sheet, where it joins the amounts from previous years
Accounts receivable
is the amount owed to the business by customers (creditors)
Inventory
is the value of raw materials & stock
Current assets
may also include ‘marketable securities’ (=shares intended for disposal within one year)
Fixtures
are part of a building that cannot be moved, such as lights
Fixed assets
may also include long-term financial investments
Intangible assets
include patents, trademarks & ‘goodwill’ (reputation, contacts and expertise of companies that have been bought)
Bank debt
(=loan capital) also includes any overdraft (=temporary negative balance)
Accounts payable
is the money owed to suppliers
Accrued
items are those where an expense has been incurred, but the money is not yet paid. ‘Accrued salaries’ typicaly includes future bonuses
Provisions
can appear under current liabilities. These are amounts set aside for anticipated one-time payments that are not part of regular operations - perhaps a lawsuit or a compensation package for employees being laid off
Mortgage
is a long-term bank loan to buy a property
Principal
(=amount raised by issuing the bonds) is repayable to the bond holders at ‘maturity’
Share capital
(= common stock, AmE) is amount raised at initial flotation on the stock market
Retained profit
(=reserves/retained earnings)
