Whether you are running your own business or planning for retirement, there is a benefit to hiring an accountant. A brokerage firm can analyze your finances to determine the best opportunities for your money. The following are key terms you should be familiar with before consulting an accountant brokerage firm.
Breakeven Point - A term used for business to express the number of sales that need to be made to offset the cost of the product.
Depreciation - A measurement that reflects a loss in value of an asset. If you spend money to buy a car for your business that will last five years, the cost of the vehicle should be spread out over the five year time span.
Fiscal Year - This is the accounting year. The company analyzes finances and determines the budget for the fiscal year.
Present Value - This is a comparison measure between cash on hand today versus the value of the same cash in the future if invested. Use present value to plan for the best use of your cash and potentially save money for retirement.
Return on Investment - A measurement of how much money was earned on an investment expressed by a percentage.
Opportunity Cost - A comparison measurement between investment opportunities. The cost or loss of profit of any alternative options makes up the opportunity cost.
Overhead - The cost that goes into running a business regardless of the profit. Any amount of money that is used to pay the staff or outsourcing is considered overhead.
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