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A Quick Lesson in Simplifying complex business finance terms

  • Writer: Mrudula Muralidharan
    Mrudula Muralidharan
  • 18 hours ago
  • 2 min read

An image of Million Goals founder, Mrudula, peering thoughtfully into a cave. She is stood on a large rock surrounded by clear water.
A woman intensely reviews her receipts and finances, embodying stress and concentration in a modern workspace.


One of the most common things I hear from business owners is, “I don’t understand what my accountant is saying” or “I can’t make sense of my financial statements.” This lack of understanding often creates a barrier, making business finances feel complicated and overwhelming, and discouraging owners from actively managing them.


I am here to simplify numbers for you, so let’s do that with a quick 'key-words' lesson.


Some of the most common business finance terms:

  1. Revenue - It is simple the total sales your businesss has done excluding VAT

  2. Capital - It is the amount of money you as a business owners and  your business partners, if any, have introduced into the business initially

  3. Fixed Assets - They are immovable properties your business owns. For example – the office building, machinery.

  4. Current assets - It is the money someone else owes to your business

  5. Current Liabilities - It is the money your business owes to others

  6. Cash flow statement - It is a statement which shows the movement of cash in and out of your business over a specific period of time

  7. Profit and loss statement - It specifically highlights the day to day core business transactions and the net result of the same

  8. Balance Sheet - It lists all the assets and the liabilities of your business on a specific date

  9. Direct costs - They are expenses your business spends so as to sell one unit of the service or one unit of the product. They are directly related to the product/service and without these costs your business cannot sell.

  10. Indirect costs - They are expenses other than direct costs but are essential to run your business such as rent, electricity, training, marketing, sales, etc. 


Knowledge is power - it gives you the confidence to grow and the wings to flourish.

As a business owner, empowering yourself with knowledge is the key to unlocking your growth. Take the first step on your journey to financial literacy today by booking a free call with me.


Written by

Mrudula Muralidharan

Founder of Million Goals

 
 
 

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