In accounting, net refers to the amount or quantity after deductions or expenses. Net income is calculated by subtracting all expenses from gross profit. Net can also be used to describe other types of quantities, such as the total weight of a shipment after any packaging or other materials are removed. Here are some examples…
Gross: The total amount or quantity before deductions or expenses
Gross refers to the total amount or quantity before deductions or expenses. In accounting, gross refers to the total revenue generated from sales before any expenses are deducted. Gross profit is calculated by subtracting the cost of goods sold from gross revenue. Gross can also be used to describe other types of quantities, such as…
Variable Costs
In accounting and economics, variable costs are the costs that change in proportion to the level of production. They are the opposite of fixed costs, which do not change with the level of production. Variable costs are often used to calculate the break-even point, which is the point at which a company’s revenue equals its…
Fixed Costs
In accounting and economics, fixed costs or overhead costs, are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be recurring, such as interest or rents being paid per month. These costs also tend to be capital costs. Some examples of fixed costs include:…
Capital
Capital is a broad term that can refer to a variety of things, including money, buildings, equipment, and intellectual property. In economics, capital is typically defined as any asset that can be used to produce goods or services. There are two main types of capital: physical capital and human capital. Physical capital refers to physical…
Accounts Receivable (AR)
Accounts receivable (AR) is a current asset that represents money owed to a company by its customers for goods or services that have been sold but not yet paid for. AR is a short-term asset, which means that it is due within one year. Accounts receivable is an important part of a company’s financial statements….
Accounts Payable (AP)
Accounts payable (AP) is a short-term liability that represents money owed to suppliers for goods or services that have been purchased but not yet paid for. AP is a current liability, which means that it is due within one year. Accounts payable is an important part of a company’s financial statements. It is listed on…
Margin
In business, margin refers to the difference between the price at which a product or service is sold and the cost of producing it. It is expressed as a percentage of revenue. For example, if a company sells a product for $100 and it costs the company $50 to produce, the margin is 50%. There…
Deliverable
A deliverable is any tangible or intangible product or outcome that is produced as a result of a project. Deliverables can be anything from physical products to software applications to reports or presentations. They can also be intangible, such as knowledge or skills that have been transferred to the customer. Deliverables are important because they…
Monetize
To monetize means to convert something into money. In the context of business, it refers to the process of generating revenue from a product or service. There are many different ways to monetize a product or service, including: The best way to monetize a product or service will depend on the specific product or service,…
Incentivize
To incentivize means to motivate someone to do something by offering them a reward. Incentives can be financial, such as bonuses or commissions, or they can be non-financial, such as recognition, time off, or opportunities for advancement. There are many reasons to incentivize employees. Incentives can help to: There are many different ways to incentivize…
Return on investment (ROI)
Return on investment (ROI) is a financial ratio that measures the benefit an investor will receive in relation to their investment cost. It is most commonly measured as net income divided by the original capital cost of the investment. The higher the ratio, the greater the benefit earned. ROI can be used to evaluate the…