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BUSINESS MANAGER GLOSSARY
Business A - O / Business P - Z
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Business Management Glossary A - O
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- accounts payable
- accounts receivable
- activity-based costing
- annual report
- assets
- asset-based loan
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- balance sheet
- bankruptcy
- barrier to entry
- Big Six
- board of directors
- bond
- business plan
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- capitalization
- cash flow
- Certified Public Accountant (CPA)
- chamber of commerce
- Chapter 7
- Chapter 11
- collateral
- corporation
- creditor
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- debt financing
- default
- demographics
- direct marketing
- disclosure statement
- distribution
- dividend
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- earnings
- economic development agencies
- 80/20 rule
- equity
- equity financing
- estimated tax
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- factoring
- fixed costs
- floor planning
- franchise
- freelancer
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- general partner
- going public
- guarantor
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- holding company
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- income statement
- incorporate
- initial public offering
- intangible asset
- interest
- inventory
- inventory turnover
- investor
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- joint venture
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- liability
- limited liability corporation (LLC)
- limited partnership
- line of credit
- liquidate
- liquidity
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- majority shareholder
- markup
- MBA
- microprocessor
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- Nasdaq
- net income
- net worth
- newsgroup
- New York Stock Exchange (NYSE)
- niche
- nonprofit organization
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- overhead
- over-the-counter (OTC)
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A
- accounts payable
- money a company owes
- accounts receivable
- money that is due to a company from the sale of goods or services
- activity-based costing
- a method of cost accounting designed to identify streams of activity, and then to allocate costs across particular business processes according to the amount of time employees devote to particular activities
- annual report
- a document that includes detailed financial information
and is presented to stockholders of a corporation once a year
- assets
- items of value such as money in the bank, receivables, inventory,
fixtures, and equipment that a company owns
- asset-based loan
- a loan secured by the value of an asset
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B
- balance sheet
- a document that outlines a company's assets, liabilities,
and equity of the owner at a particular point in time
- bankruptcy
- the condition in which companies or individuals legally declare they are unable to pay their debts
- barrier to entry
- a strategy that prevents one's competitors from offering the same product
- Big Six
- the six largest accounting firms in the United States: Arthur
Andersen, Ernst & Young, Deloitte & Touche, KPMG Peat Marwick,
Price Waterhouse, Coopers & Lybrand
- board of directors
- managers elected by stockholders to oversee the
daily operations of a corporation
- bond
- a debt instrument issued by a company to raise money
- business plan
- a document that outlines a company's goals, defines its
product and market, provides financial data and resumes of key personnel, and serves as an operating tool to manage the business and obtain financing
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C
- capitalization
- the amount of money used to start a business
- cash flow
- a measurement of a company's inflow and outflow of cash
over a period of time
- Certified Public Accountant
- an accountant who has met state requirements and has passed a series of exams
- chamber of commerce
- an association of business people that works to promote business in the geographic area
- Chapter 7
- a form of bankruptcy in which a company sells its assets in
order to pay its debts
- Chapter 11
- a form of bankruptcy that allows a company to reorganize in order to meet its financial obligations and then resume operations
- collateral
- something of value used to guarantee a loan. If the borrower defaults, the creditor keeps the item that was pledged as collateral
- corporation
- a business structure that sets up a company as a separate legal entity from its owners and enables it to raise capital through the sale of stock
- creditor
- someone to whom one owes money
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D
- debt financing
- a method of raising money for a business through loans
or the sale of bonds
- default
- failure to pay a debt
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demographics
- the characteristics of a population that marketers can use to determine which consumers would be most interested in their merchandise
- direct marketing
- a strategy that consists of targeting a group of
consumers who have a need for the products or services of a business, and mailing promotional materials to them
- disclosure statement
- the document required by the Securities and Exchange Commission (SEC) at the time of a company's initial public offering (IPO) that states the purpose of the business, the number of shares of stock that will be offered, and what the company plans to do with the money it obtain from the sale of stock
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distribution
- the process of transporting goods from the factory to the consumer
- dividend
- a payment to the owners of stock in a corporation
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E
- earnings
- a company's income
- economic development agencies
- state and local government-operated departments that offer tax and other incentives, sponsor business incubation programs, and relax zoning regulations to encourage businesses to relocate or establish themselves in the area
- 80/20 rule
- the belief that 80 percent of a company's business comes from 20 percent of its customers
- equity
- the value of stock
- equity financing
- a method of raising money for a business through the sale of stock in exchange for partial ownership of the business
- estimated tax
- an amount of tax calculated and prepaid on a quarterly basis
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F
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factoring
- a method of financing whereby a lender purchases the accounts receivables of a business at a discount to their face value
- fixed costs
- a company's expenses that do not change regardless of the sales volume; Examples: rent, utilities, interest, and insurance premiums
- floor planning
- a method of financing inventory whereby the lender bases the loan on the credit of the vendor as well as the credit of the business applying for the loan
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franchise
- a business that is licensed by a larger company and operates under the regulations of that parent company. McDonald's is an example of a franchise
freelancer
- a person who works independently without commitment to any one company
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G
- general partner
- the partner in a limited partnership who has responsibility for the day-to-day management of the company
- going public
- the process by which a company sells stock to the public
- guarantor
- an individual who agrees to be responsible for the debts of another individual or business
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H
- holding company
- a company whose purpose is to hold stock in
another company
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I
- income statement
- a document that outlines expenses, revenues, and net income of a business. Also known as a profit and loss (P&L) statement
- incorporate
- to register a business with the state in order to separate
its legal responsibilities from that of its owners
- initial public offering
- the first time a stock is offered for sale to the public
- intangible asset
- something of value that has no physical properties; customer loyalty, goodwill, reputation, and trademarks
- interest
- payment for borrowing money
- inventory
- raw materials and finished products a company holds
- inventory turnover
- the rate at which a company's inventory is sold out over a period of time
- investor
- someone who provides money in exchange for partial ownership of a company
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J
- joint venture
- business structure that consists of two or more groups of people
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K
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k
- definition
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L
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liability
- an obligation to pay an amount to someone else
- limited liability corporation (LLC)
- business structure that is taxed like a partnership and provides limited liability for its owners
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limited partnership
- business structure that consists of general
manager responsibilities for daily management decisions and who assumes liability for the debts, and investors who have little involvement and whose liability is limited to the amount of their investment
- line of credit
- a type of revolving loan that lets a business borrow money as needed up to a set amount without having to reapply each time
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liquidate
- to sell assets in order to raise cash
- liquidity
- the ability of an asset to be converted to cash
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M
- majority shareholder
- someone who owns at least 51 percent of the stock in a company
- markup
- the difference between what it costs to produce an item and its selling price
- MBA
- an advanced degree in business administration
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microprocessor
- a chip that acts as the brain of a computer system, handling logic operations that enable the computer to perform its functions. Microprocessors are typically categorized by the speed (in megahertz) in which the chip works, so that a 200MHz chip runs twice as fast as a
100MHz chip. However, task speed is also determined by other factors outside the chip itself. Example Sentence: The first microprocessor designed for a personal computer was the 2MHz 8080 created by Intel in 1974.
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N
- Nasdaq
- an electronic stock market operated and regulated by the National Association of Securities Dealers (NASD), an organization of brokers and dealers
- net income
- total income less taxes and expenses
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net worth
- the difference between the assets and liabilities of a company
- newsgroup
- a feature of the Internet that allows participants to post
messages and respond to each other
- New York Stock Exchange (NYSE)
- the largest and most active stock market in the world
- niche
- a narrow segment of a market
- nonprofit organization
- a business structure whose chief advantage is its exemption from paying taxes; main disadvantage is that it is subject to a strict set of regulations; designed generally for religious
organizations, educational institutions, and social welfare organizations
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O
- overhead
- expenses incurred as part of doing business; Examples: rent, utilities, and insurance
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over-the-counter (OTC)
- a method of selling securities electronically or by phone rather than at a stock market
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