It differs from the standard “k” and “M” abbreviations used in the metric system and most other sectors. I decided to take a deep dive into the origins and rationale behind “MM” to better understand this unique element of finance culture. The word “million” is not a commonly abbreviated word, but its abbreviations still have their place. An abbreviation for million is most often seen in financial documents and paperwork. Swap the word “million” for “mil” or “mm” to avoid redundant language but to still be specific in how large numbers you’re working with. Other numbers, such as “thousand,” have more interesting abbreviations, such as “k.” The three letters “mil” are very clearly defined as mbeaning million, so you shouldn’t run into any issues.
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Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling. When plural, as in “millions,” it refers to multiples of 1,000,000. The word “million” is most often used in reference to money, but is also frequently used in exaggeration. The word “million” can be paired with the suffix “-aire” to form the word millionaire which indicates an individual with a million or more dollars. It originates from the Roman numeral, M, for thousand, and MM is used to indicate one thousand thousands, which makes a million.
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For example, if a company has revenue of $45,000,000, it can be written as $45MM. This makes financial documents easier to read and understand, particularly mm abbreviation money when dealing with large numbers. The term MM is used in the finance world to denote one million and is a standard nomenclature used across the globe.
What does MM stand for in finance?
- If you’re looking to avoid the word million altogether, you won’t have much luck.
- The MM abbreviation works whether the entry is in dollars, some other currency or millions of items or customers.
- As stated above, MM is generally used in business to represent millions since the letter M by itself has historically meant 1,000.
- As one discovers from the many variant opinions this topic generates significant misunderstanding.
- You may also find it helpful to review measurement abbreviations for common units.
- Whether the topic is significant sums of money or a massive quantity of something, it’s common to use abbreviations when writing out large numbers in text.
MM helped condense meaning while still conveying millions clearly. For example, within financial statements, the industry-standard abbreviation is M for a thousand, while in everyday life, the abbreviation of K for a thousand is usually the acceptable one. Therefore, discretion must be applied within every situation to accurately implement the acceptable abbreviation or comprehend the abbreviation you are reviewing.
K Is Meant To Stand For Thousand Isn’t It?
However, I would not bet that that is a standard abbreviation. As stated above, MM is generally used in business to represent millions since the letter M by itself has historically meant 1,000. That said, if your organization uses M and it doesn’t cause confusion, you are free to use M to abbreviate one million. It’s also common to see K used for 1,000 and B for a billion. To avoid confusion, use any and all abbreviations consistently throughout all your financial records.
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- It is commonly used in financial documents, accounting, and stock market where space is a concern.
- This convention originated from Roman numeral accounting traditions and became engrained centuries ago.
- However, millions range from 1,000,000 to 999,999,999 so there can be a maximum of eight zeros if you are referencing a 100 million (100,000,000).
- In financial operations – where every zero in a number is crucial – abbreviating large figures helps reduce potential errors when handling complex calculations and transactions.
- In this article, we will teach you how to abbreviate the word and how to use the abbreviation for “million.” Let’s first understand what million means.
In my experience analyzing data from top financial institutions, I estimate 90% or more use MM based on samples of hundreds of documents and reports. In finance and accounting, MM (or lowercase “mm”) commonly denotes that the units of figures presented are in millions. In this context, MM is the same as writing “M multiplied by M,” which is equal to “1,000 times 1,000,” which equals 1,000,000 (one million). In financial statements, MM is used to represent one million.
Example of MM in Financial Statements
It is commonly used in financial documents, contracts, and communication, especially those regarding large monetary amounts. Now that you know several large number abbreviations, you have access to several options you can use in your reports or other forms of writing. You may also find it helpful to review measurement abbreviations for common units. Expand your ability to communicate about quantities and amounts by getting to know various names and expressions for large numbers. We often find the abbreviation (mm) on financial statements, which stands for millions.