When you sit and listen to the serious people on radio or television – who are not there just for the fun of it, no . . . . they are there to teach us all how to understand where our finances have gone or how best to run that account. They are the ones who the news broadcasters insist on calling in when there is a newsworthy article about banking or oil prices; the sort of things that drastically effect the money markets and share prices. These folks, very often male, will toss out well known phrases and acronyms and any newbie, trainee business mogul can do no wrong if they begin to learn their way around this strange lingo!
Earnings per share (EPS) – critical . . . this is the measure of how much profit ad company is making for its shareholders. Economies of scale, another very serious phrase which means the cost advantages of buying items in bulk rather than in smaller piece-meal quantities. the huge bulk price obviously saves hugely financially but there are the issues of storage and disposal to be considered. The price of a individual item should decrease as the quantity purchased increases. Financial management, now here we have a super biggie that basically describes all the planning, analysing, monitoring and controlling of any company’s finances. Margin, now this is another odd one but simply, it means the amount of money a company makes, expressed as a percentage. As an example, a gross profit of £1m on sales of £10m is a 10% profit margin.