Quick glossary
Asset
Anything of worth that is owned. Accounts receivable are an asset
Balance
The amount of money remaining in an account
Break-even Analysis
A method used to determine the point at which the business will neither make a profit nor incur a loss. That pont is expressed in ither the total dollars of revenue exactly offset by total expenses or in total units of production, the cost of which exactly equals the income derived by their sale
Budget
A plan expressed in financial terms
Capital
Money available to invest or the total of accumulated asse available for production
Cash
Money in hand or readly available
Cash Flow
The actual movement of cash into and out of business: cash inflow and cash
Debt
That money that is owed
Depreciation
A decrease in value through age, wear, or deterioration. Depreciation is a normal expense of oing business which must be taken into account. There are laws and regulations governing the manner and time priods that may be used for epreciation.
Elevator Pitch
An elevator pitch is a brief (think 30 seconds!) way of introducing yourself, getting across a key point or two, and making a connection with someone. It’s called an elevator pitch because it takes roughly the amount of time you’d spend riding an elevator with someone.
Equity
The monetary value of a property or business that exceeds the claims and/or liens against it by others.
Exit Strategy Startup
A business exit strategy is an entrepreneur’s strategic plan to sell their ownership in a company to investors or another company. An exit strategy gives a business owner a way to reduce or liquidate their stake in a business and, if the business is successful, make a substantial profit.
Fixed Expenses
Those costs that don’t vary from one period to the next. Generally, these expenses are not affected by the volume of business. Fixed expenses are the basic costs that every business will have each month.
Forecast
Forecasting involves making predictions about the future. In finance, forecasting is used by companies to estimate earnings or other data for subsequent periods. Traders and analysts use forecasts in valuation models, to time trades, and to identify trends. Forecasts are often predicated on historical data.
Gross
Overall total before deduction
Lease
A long term rental agreement
Loan
Money lent at interest
Net
What is left after deducting all expenses from the gross.
Net Worth
The owner’s equity in a given business represented by the excess of the total assets over the total accounts owing to outside creditors (total liabilities) at a given moment in time. The net worth of an individual is determined by deducting the amount of all personal liabilities from the total of all personal assets.
Operating Cost
Expenditures arising out of current business activities. The costs incurred to do business: salaries, electricity, rental, deliveries, etc
Payable
Ready to be paid. One of the standard accounts kept by bookeper is “account payable”. This a list of those bills that are current and due to be paid.
Profit
Financial gain; returns over expenditures.
Profit & Loss Statement
A list of the total amont of sales (revenues) and total costs (expenses). The difference between revenues and expenses is your profit or loss. Same as income statements.
Profit Margin
The difference between your selling price and all of your costs.
Receivable
Ready for payment. When you sell on credit, you keep an “account receivable” asb a record of what is owed to you and who owes it. In accounting, a “recivable” is an asset.
ROI
Return on investment
Takeover
The acquisition of one company by another
Wholesale
Selling for resale
Working capital, net
The excess of current assets over current liabilities