Master Your Finances: A Step-by-Step Guide to Creating a Budget That Works for Beginners Creating a budget might seem daunting, but it's one of the most empowering financial decisions you can make. Whether you're looking to save for a major goal, manage debt, or simply gain control of your finances, a well-structured budget is your roadmap to success. In this guide, we'll break down the process into simple steps tailored for beginners. Let's get started! Step 1: Assess Your Financial Situation Before you can create a budget, you need to understand your financial standing. Gather all relevant information, such as: Monthly income: Include your salary, freelance income, or other sources of earnings. Expenses: Track all expenses, including rent, groceries, transportation, and discretionary spending. Debt: Note down credit card balances, student loans, or other obligations. Savings: Review your emergency fund and other savings accounts. Pro Tip: Use budgeting apps like M...
Measuring Business’ Profitability Without Seeing Net Profit Earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings before interest and taxes (EBIT). EBIT , EBITDA and operating profit are forms of profit of a company before considering interest and taxes paid and writing off depreciation and amortization (only in the case of EBITDA ) showing the core performance of the company. Where is it shown? There are 3 financial statements – • Profit & loss statement • Balance sheet • Cash flow statement It is shown in the profit & loss statement. For example- REVENUE RS.20000000 COST OF GOODS SOLD RS 4000000 GROSS PROFIT RS 16000000 MARKETING RS 2000000 OFFICE AND ADMINISTRATION 3000000 EBITDA 11000000 DEPRECIATION 1000000 AMORTIZATION - EBIT 10000000 INTEREST 2000000 PROFIT BEFORE TAX 8000000 TAX 2400000 NET PROFIT 5600000 Operating profit = EBIT- (non-operating profit) Important terms to know. · Amortization-writing off the value o...