- A business transaction record.
- A professional individual capable of setting up and
keeping books; business records as well as managing
Payable - The moneys that a business owes to its suppliers
of goods and/or services.
Receivable - The moneys that are owed to a business
from the sale of goods and/or services.
Based Accounting - An accounting system that shows the
sale, cost or other event when it actually occurs instead
of when money changes hands. What is important is the
contracting of the event rather than the receipt of
payment for the event.
Expenses - These expenses include salaries, office supplies,
telephone, rent, electric, and depreciation of office
Test Ratio - The acid test ratio may be the most important
test that a potential lender uses to determine whether
or not a business will be able to meet in financial
obligations. The ratio is cash plus other assets that
can be immediately converted to cash divided by current
- The process of paying off a debt over the period of
its economic useful life thru a schedule of payments.
- An examination of an idea or situation to determine
a better understanding.
of Incorporation - A state legal document that outlines
the purposes and regulations for a corporation.
- Anything of value that is owned.
Selling - The selling of additional products and/or
services to existing customers.
Debt - Un collectable moneys that are owed to the business.
- The remaining money in an account.
Sheet - An itemized breakdown which lists the total
assets and total liabilities to display the net worth
as of a given date and time.
of Directors - The individuals that the stockholders
elect who work together to manage the business.
- The system of recording the dollar amounts of business
transactions to develop detailed accounting records.
- The process of developing a name, trademark or design
that differentiates a product or service from other
products and services.
Analysis - A way of determining at which point a business
will break even that is not showing a profit and not
showing a lose.
- The matching and planning of income or revenues with
expenses or overhead over a period of time.
Plan - A detailed written document that explains and
describes its business, objectives, environment, strategies,
marketing, competition, operating procedures, personnel
requirements, business insurance and financial projections.
Venture - The undertaking of a commercial enterprise
that may involve financial risk.
- Accumulated fixed and personal property and liquid
assets available for a business venture.
Budget - A budget that details the purchase of capital
items such as buildings, leasehold improvements and
- Actual moneys that are immediately available.
Basis Accounting - A system where the transfer of cash
controls the recording of sales and expenses.
Discount - A reduction of an amount receivable because
of an earlier payment than otherwise required.
Flow Analysis - The tracking of the actual moving of
cash in and out of a business, that is, cash in and
Receipts - Moneys received from customers.
- Assets of a business that are assigned to a lender
to help secure and outstanding debt.
- An agreement involving the mutual responsibilities
of two or more parties.
- An organization which becomes a legal business entity
and formed under a state's statute for the purpose of
carrying on a business enterprise in such a way to make
the enterprise distinct from the individuals who control
it. The corporation may be for or not for profit.
of Goods Sold - Costs directly related to the manufacturing
or fabrication of products sold. This usually includes
base materials, building costs, equipment costs and
other related overhead expenses.
of Services Sold - Cost directly related to the providing
of a service to a customer. This usually includes all
related expenses incurred to provide the services.
Assets - Cash and cash equivalents, securities and accounts
receivables and other assets of the business that can
be liquidated quickly within a year.
Liabilities - Amounts due and payable by the business
in less than a year.
Ratio - The ratio of a business's current assets to
its current liabilities or current assets divided by
Profile - Determination of the different characteristics
and habits of a typical customer of a business.
- It is a accounting entry reflecting money spent or
to be spent by the business depending of whether cash
or accrual accounting is elected.
- Money that is owed.
Capital - That part of a business's capital that must
Financing - The use of borrowed money to finance a business.
- Determining the value of customers by age, sex, income,
occupation, education and other factors.
- A deterioration of value, which is a normal expense
and must be considered do to a reduction in value due
to age, wear or deterioration. Government regulations
and laws determine the time and manner that may be used
Diligence - A legal responsibility to checking out an
investment as to worthiness in relationship to stockbrokers
and other financial professionals. The requirements
can be very broad and vast and varied in order to qualify
as having done due diligence.
- A individual who develops a business opportunity to
introduce a new product, process or service and who
raises the necessary money and recruits the necessary
talent to develop and promote the same.
- The remaining value after all related liabilities
have been deducted from a particular asset or assets.
Financing - The securing of capital from an investor
whereby they become part owners of the business.
Summary - That section of a business plan, which briefly
describes the major components that will be detailed
in the rest of the business plan. It should basically
describe the who, what, when, where, why and how of
the business plan.
Program - The process that an investor would use to
exit a business by turning his investment into cash.
- This occurs when a supplier sells its accounts receivables
to a particular financial expert called a factor. The
factor immediately pays the amount of the receivables
less a discount and receives the payments when they
arrive from the customers. This is a crucial part of
finance operation for many businesses.
Reports - Reports that give data about assets, liabilities,
revenue and expenses at a given time.
Statement - A written presentation that normally includes
a balance sheet, profit and loss statement and a cash
In First Out (FICO) - A way to determine the value of
inventory that takes into account that the goods first
acquired are the goods first sold. This seems to be
the most commonly used method because it takes into
consideration the physical movement of the inventory.
Year - Usually consists of a 12 month period that can
really begin and end on any calendar date and establishes
a beginning and a end for that company's accounting,
planning and tax purposes.
Assets - Buildings, leasehold improvement, equipment
and machinery and vehicles that are owned by the business.
Costs or Fixed Expenses - Those business costs that
do not fluctuate from one time period to the next.
- The way of calculating the future of a business's
financial success in terms of reasonable probabilities.
- A legal arrangement that contractually obligates one
business to follow and operate on another company's
procedures and operating guidelines.
- One billion bytes.
and Administrative Expenses - Expenses directly related
to the management of the business and not the fabrication
or the selling of the product.
- Referring to the objectives of the business, which
can be short or long term.
- Grand total before deductions
- Referring to the activity from the browser to the
server; for example, if a web site has a page that contains
text and two graphics and that page is visited that
would equal three hits.
- When a computer makes itself available for another
computer to access information or files.
Statement - The financial report that displays total
moneys in and total moneys out in detail.
Life Cycle - The entire duration or cycle or history
of a business from its earliest stages to its eventual
Assets - Assets such as patents, copyrights, trademarks
and branding etc.
- That amount of money that is required to be paid back
over and above the principal that is owed.
- Assets held by a company that are not yet sold. It
can include raw materials, partially completed products
and fully completed products.
Venture - A business venture involving two or more persons
and First-Out (LIFO) - Determining the value of inventory
on the basis that the units most recently acquired are
the first units that are sold.
- Rental agreement as opposed to a contract for purchase.
Of Credit - A banking instrument given to a person or
business to place the credit of the bank in place of
the credit of a person or business. Letters of credit
often show a dollar limit that the letter of credit
may be used.
- Using borrowing to increase the ability for the business
to operate or conduct business.
Liability Corporation (LLC) - Legal business entity
that is similar to an S Corporation but does provide
limited liability to the owners and provides different
ways that the owners can divide up the profits.
- Converting an asset into cash.
- The ability that a business has to turn assets into
- Money borrowed at interest or without interest.
- The study of the ability that a business has to move
inventory from one location to another.
- The ability that a company has to control and guide
Statement - A statement of a company's operation, market
position and competitive advantages.
- That which represents the total number of people and
their spending capability for your services or products
within the area that you are able to provide your services
Analysis - Evaluation of the different factors of a
market and the measurement of that market's ability
to buy products and services.
- Satisfying the needs of customers through identification,
information and persuasion.
Plan - The combination of information from a market
analysis and the implementation of a marketing strategy
to advance a business.
Share - That portion of total sales including your competitors
and your sales combined in relation to your participation
of the total sales in that market represented as a percentage.
Strategy - The way that a company promotes its business
to successfully gain and maintain the business from
Profit After Taxes- Total revenue less all expenses
less interest and less all taxes.
Profit Before Taxes - Total revenue less all expenses
Worth - The net value of assets minus liabilities.
- One time not repeating, as in nonrecurring expenses
which are normally only at the start up of a business.
Payable - An obligation for a business to pay in a form
of a promissory note incurred by the business. Notes
payable are added to the liability section of a company's
Receivable - Money that is owed to a business in the
form of a promissory note promising payment to a business.
Notes receivable are placed in the assets section of
a company's general ledger.
- The eventual goal that a company is striving to reach.
Objectives are long term.
Expenses - Excluding expenses associated with the fabricating
or provision of the actual goods or services, these
expenses involve administrative, research and selling
- Activities of the business broken down into daily,
weekly or monthly.
- Taking a portion of your business and assigning it
to an outside provider. This is normally done to reduce
expenses associated with back up for that particular
portion of the business.
- A marketing activity that makes a place for a particular
product or service as it relates to the competition
as in the fastest or the largest
Stock - Stock within a corporation that is given preferential
treatment as it pertains to dividend payments.
- When total revenues exceed total expenditures.
and Loss Statement - Same as income statement, this
statement displays revenues and expenses and the difference
between the two.
Margin - Taking the selling price of a product or service
and deducting all costs relating to the fabrication
and provision of that product or service.
Forma - A document displaying a projection of future
activity of a business with income projections presented.
A pro forma financial statement uses assumptions that
current actual operations will produce a projected financial
result .Public Offering - When a corporation offers
a portion of its shares or stock to the public to obtain
Ratio - Cash plus Accounts Receivable divided by Current
Of Return - Normally expressed as a percentage, this
is the amount that an investor has received over and
above the amount invested in a company, that is, return
divided by total amount invested.
- A forced process due to financial problems almost
to insolvency whereby the actual corporate structure
is compelled to undergo a dramatic change.
Earnings - That amount of capital that is retained in
a business and not paid out as dividends to stockholders.
on Equity - Profit of a company divided by the total
equity in the company expressed as percentage.
on Investment (ROI) - Profit divided by invested capital.
and Exchange Commission - A commission of the government
that is in charge of overseeing the organization and
regulation of the stock and securities exchanges.
Business Administration (SBA) - A US government agency
that primarily guarantees lenders that loans made to
small businesses will be paid. The SBA can also be a
direct maker of a loan.
Proprietorship - A legal business entity where there
is individual owner of the business who is not incorporated
and has not taken on a partner and who has taken on
personal liability of his or her business.
- The method or plan used to implement and achieve a
Chapter S Corporation - A corporation whose share holders
have agreed to pay taxes directly on all of the earnings.
Another name for a Sub Chapter S Corporation is a Tax
Option Corporation. On this type of corporation there
is no corporate tax on its income and all expenses are
proportionally deducted by each of its shareholders.
- Term used in relationship to the advancing of a position
of a debt either ahead or behind another debt.
Over - The acquisition of one business by another business.
Market - The focusing on specific individuals or groups
to acquire more potential customers.
- A form of additional payment added to imports and
exports also known as a duty.
of Sale - That which is determined in a purchase as
to specific aspects of a purchase.
Credit - The permission that is given to a business
to buy from its suppliers on an open account.
Loan - Borrowed money that is not backed by any collateral
or security to guarantee payment.
Expenses - Those expenses that fluctuate as in utility,
material and other varying expenses.
- For our purposes, a determination for accounting displaying
the difference between what was forecasted and what
Capital - Money invested by private individuals primarily
to assist in the start up of a company.
Statement - Also known as objective of a business, primarily
what a company hopes to achieve as a long term goal.
Capital - The amount of money that a business has in
available cash, which is, also expressed as current
assets minus current liabilities.