So, here’s our (alternative) guide to finance for banking professionals…
- Fixed costs– Not to be confused with the ‘cost of getting a fix’, a fixed cost remains unchanged even with variations in output.
- Gearing– Again, easily confused with ‘actions involved in getting ‘gear’, ‘blow’ or any other illegal substance’. Gearing is actually a measure of the extent to which a company is funded by debt.
- Depreciation– Certain assets, such as buildings and equipment, depreciate, or decline in value, over time. Embarrassing chairmen depreciate at a faster rate than other assets.
- Current Liabilities– The board, the regulators, the politicians..? The real definition is: money owed to suppliers, reducing the amount the business itself has had to invest in working capital.
- Acid Test– To dabble with Class A narcotics…or a measure of a company’s ability to pay its short term debts.
