GLOSSARY

Gross Profit

This is the profit made after deducting the cost of sale (also known as variable costs or direct costs) from your sales figure. All figures should exclude VAT, if you are VAT registered. see profit and loss for examples of this.

Gearing

Usually expressed as a percentage, it is the ratio of borrowings to shareholders funds. If over 100% then total borrowings are greater than shareholders funds and the company would be vulnerable to interest rate rises.

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