This publish is a part of a sequence sponsored by Previous Republic Surety.
If you happen to’re confused concerning the letter designations that stand for hundreds and tens of millions, you’re not alone. And it’s not your fault. In truth, it’s one in every of our most incessantly requested questions. Right here’s why you’re confused and what to do about it.
The place Does the mm Abbreviation Come From?
Western civilization has had two highly effective influences — the traditions of the Greeks and the Romans, and there may be typically battle. The Greeks would seek advice from the god of the ocean as Poseidon, whereas the Romans would name him Neptune. For the Romans, the god of wine can be Bacchus, and for the Greeks, it might be Dionysus. These variations carry themselves into many components of our tradition, together with monetary evaluation.
As a younger banker within the mid-80s, I realized what had been taught for a lot of a long time earlier than, that we abbreviate hundreds in our evaluation with the letter M. If we needed to indicate tens of millions, we might present that as MM. For this, we should always credit score the Romans. M is the Roman numeral for thousand and MM is supposed to convey one thousand-thousand — or million. To take it additional; one billion can be proven as $1MMM or one-thousand million.
Nevertheless, reality be identified, if there have been an historic Roman right here and we requested him to interpret our use of Roman numerals, we might discover that technically MM means two thousand and MMM means three thousand, so there are flaws on this custom. This jogs my memory of the outdated joke about an historic Roman that goes right into a bar, holds up two fingers in a peace signal to the bartender, and says, “5 beers, please.”
Ok Is Meant To Stand For Thousand Isn’t It?
Wait a minute, you say. I do know I’ve seen jobs posted that pay $50K, and Ok is supposed to face in for a thousand. And you’d be right, due to the Greeks. Ok comes from the Greek phrase kilo which implies a thousand. The Greeks would likewise present million as M, brief for Mega. So if we keep in line with the Greek abbreviations, then billion can be proven as a letter G (Giga). Consider your laptop expressing bytes of reminiscence as kilobyte, megabyte, or gigabyte. Nevertheless, on the subject of billion, we don’t actually see G or MMM because the abbreviation for billion. We usually tend to see a headline that reads the federal government spent $60B on a brand new venture. They’re utilizing B for billion. What can I say? B for billion isn’t Greek or Roman; it’s simply the primary letter of the phrase billion. A lot for consistency.
I noticed a headline not too long ago in The Daily Journal of Commerce that learn the brand new downtown publish workplace was to be constructed for $89M. On this planet of accounting and monetary evaluation, that reads $89 thousand {dollars}, however we all know from context that the headline author meant $89 million {dollars}. We generally should code-switch and use context to find out what the creator is telling us. I referenced the 2021 Associated Press Stylebook utilized by the vast majority of journalists to see if the information would weigh in on how one can abbreviate thousand or million. When writing, the information advises, to make use of figures just for something lower than one million, however spell out “million,” “billion,” and ‘trillion” for numbers of 1 million or larger, resembling 2.4 billion. Moreover, the Related Press recommends abbreviating tens of millions as “M” and billions as “B” in headlines.
Brokers will even generally see us talk M as hundreds once we quote surety bond rates or agent commissions. For instance, the usual Class B charge begins at $25/M for the primary $100M; then $15/M for the following $400M; then $10/M for the following $2MM. These charges are expressed per thousand and the MM denotes tens of millions. Likewise, we could quote you a single and mixture contractor line of authority. That line could also be expressed, as an illustration, as $5MM single and $15MM mixture. In case you are an agent or a contractor, you could have seen an e-mail out of your surety underwriter that claims one thing like, “The shopper ought to increase their bank line to $1MM.” You now know that years of custom have skilled us to indicate a million {dollars} this fashion.
Whereas the fields of accounting, banking, and finance have adopted the Roman custom, different fields resembling laptop programming and the high-tech business have adopted Greek-influenced abbreviations. As we combine our traditions, it generally turns into troublesome to know what somebody intends to convey expressing hundreds or tens of millions in an abbreviation. It’s an imperfect world.
Nonetheless Have Questions? We’re Right here To Assist?
At Previous Republic Surety we search to ship transparency and readability in our communications. If you happen to see an abbreviation that’s complicated or unclear, please attain out to your native underwriter or branch for clarification, even in case you are simply asking for a buddy. If you need to study extra about Previous Republic Surety and a few of our providers like Commercial Surety Bonds, and Contract Bonds, or simply need extra info, don’t hesitate to contact us right this moment.
This weblog was initially revealed on the Old Republic Surety website. It’s reproduced right here with permission.
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