Cap Rate - Capitalisation Rate - It is the % Return on an Investment. Used to compare Business etc
For example $100,000 in the bank, Interest Paid $6,000 year is a Return on Investment of 6%
For example $100,000 invested in a business may return 30% or $30,000 per year
Depreciated Value- Tax term for diminishing values of plant & equipment, vehicles,
fixtures and fittings.
E.B.I.T - Earnings Before Interest & Tax After Proprietor or Manager's Wage
Freehold - The Land and any Fixed Improvements and or Buildings.
GST. Goods & Services Tax (Currently 10%)
GP – Gross Profit. - Also known as Margin or Profit
The Difference between Cost Price and Selling Price
GP% - (Gross Profit Percentage) Is the $ and or cents of Profit Expressed as a % of the Selling Price.
How To Find the Gross Profit in Money & Express it as a %:
MU - Mark Up - The amount of Profit (In $ & Cents) that is added to the Cost Price
MU% - It is the Mark Up amount of Profit (added to the Cost Price) expressed as a % of the Cost Price
How Do we Mark Up a Product to achieve a Selling price?
P.E.B.I.T - Proprietors Earnings Before Interest & Tax
P.E.B.I.T.A - Proprietors Earnings Before Interest, Tax & Amortisation
P.E.B.I.T.D.A. - Proprietors Earnings Before Interest, Tax, Depreciation & Amortisation
T.A.P – To Approved Purchaser
Leasehold Business- The land & Buildings is rented or leased from the landlord (Owner)
R.O.I - Return on Investment - See Cap Rate at top of page
S.A.V - Stock at valuation. ( Normally last invoice cost price.)
W.I.W.O - Walk in walk out – Includes Stock at time of sale, Plant & Equipment, Goodwill etc
For an explanation of commonly used Business terms call Kevin Bishop -
Abisha Business & Property Sales. Abisha Pty L td - Business & Property Sales