Business Financial Literacy Now let’s understand various business financial literacy concepts and terms, which will be helpful in making sound financial decisions. Gross profit/loss: Gross profit/loss is the difference between revenue and the cost of making a product or providing a service, before deducting overheads, payroll, taxes, and interest payments. Net profit/loss: Net profit/loss is a measure of the fundamental profitability/loss of the venture. Income statements: The income statements show the revenue, expenses, and profits for a specific time period. Balance sheet: Balance sheet reflects the assets, liabilities, and owner’s equity at a point in time. In other words, it shows, on a specific day, what the company owns (assets), what it owes (liabilities), and how much its net worth (owner’s equity) is. Receivables: Payments that are to be received from the customers on a future date as per the agreement. Payables: The payables are the money owed to others for products or services, the company has purchased on credit. Term loan: A term loan is a long-term loan generally taken to buy fixed assets and which is repaid in installments over a period of time. Working Capital loan: A working capital loan helps a business/ MSME to fund its day-to-day or short-term operations. For example- loan for procuring raw materials and inventory. Cost Centres: Any unit of an entity (here MSME enterprise) selected with a view to accumulating all costs under that unit is known as cost centre. Cost is incurred in a cost centre. The unit can be division, department, section, group of plant and machinery, group of employees or combination of several units.For effective costing system, MSMEs may constitute any of the following cost centres to meet with their requirements: MSMEs can take help of Cost & Management Accountants to formulate effective business strategies and continuity plans to ensure profitability and sustainability. Small Industries Development Bank of India Small Industries Development Bank of India (SIDBI) set up on 2nd April 1990 under an Act of Indian Parliament, acts as the Principal Financial Institution for Promotion, Financing and Development of the Micro, Small and Medium Enterprise (MSME) sector as well as for co-ordination of functions of institutions engaged in similar activities. SIDBI has been setup with a mission to facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system. SIDBI’s Vision 2.0 focusses on transforming itself as an All India Financial Institution to create an integrated credit and development support role for the Bank by being a thought Leader, adopting a Credit-plus approach, creating a Multiplier effect and serving as an Aggregator, in the MSME space. Government announced inclusion of Retail and Wholesale trade as MSMEs From 2nd July 2021, Retail and Wholesale trades have been included in MSMEs for limited purpose of availing the benefits of priority sector lending scheme under RBI guidelines. Also they will be allowed to register on Udyam Registration Portal.