Accountant

One who is trained and qualified in the practice of accounting or who is in charge of public or private accounts.

Accounting

The systematic recording, reporting and analysis of the financial transactions of a business or government.

Accredited Investor

A term defined by various countries’ securities laws that characterizes investors permitted to invest in certain types of higher risk investments including seed money, limited partnerships, hedge funds, private placements, and angel investor networks. The term generally includes wealthy individuals and financially-oriented organizations such as banks, insurance companies, significant charities, some corporations, endowments, and retirement plans.

Acquisitions

Acquiring control of a business, called a target, by stock purchase or exchange, either hostile or friendly. Also called a takeover.

Administrative Expenses

Necessary expenses associated with the general operation of an organization that cannot be attributed to any one department or business unit.

Alpha

A coefficient which measures risk-adjusted performance, factoring in the risk due to the specific security, rather than the overall market.

Alpha personalities are dominant in groups, in contrast with Betas.

Amortize

To write or pay off of debt in regular installments over a period of time, often related to an asset’s lifetime.

Angel Investor

An individual who provides funding to one or more start-up companies. The individual is usually affluent or has a personal interest in the success of the venture. Such investments are distinguished by high levels of risk and a potentially large return on investment.

Annual Report

Audited document required by the Securities Exchange Commission in the U.S. and sent to a public company’s or mutual fund’s shareholders at the end of each fiscal year, reporting the financial results for the year (including the balance sheet, income statement, cash flow statement and description of company operations) and commenting on the outlook for the future.

Audit

An examination and verification of a business’s financial and accounting records and supporting documents by a tax professional or governmental tax regulatory authority.

Balance Sheet

A quantitative synopsis of a company’s financial condition at a specific point in time, including assets, liabilities and net worth. The first part of a balance sheet illustrates all the productive assets a company owns, and the second part shows all the financing methods (such as liabilities and shareholders’ equity). Also called a statement of condition.

Ball-Park Figure

A figure given as an estimated value based on information available. Also called a ball park estimate.

Benchmark

A standard, used for comparison.

Bid Bond

A bond purchased by a business or individual when bidding on a large project or sale, in order to demonstrate that sufficient funding exists to complete the transaction if the bidder is selected. The bond guarantees that the bidder will not be prevented from fulfilling the contract by availability by lack of funding.

Bond

A debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay them interest and/or to repay the principal at a later date.

Bonding Company

A financial entity, most commonly an insurance company, which assumes the risk of a surety bond obligee by guaranteeing payment on the bond in the event of a default or a failure of the obligee to perform its contracted services.

Bookkeeping

The systematic transcription of a business’s financial transactions.

Bottom Line

The amount left after taxes, interest, depreciation, and other expenses are subtracted from gross sales. Also called net earnings, net income, or net profit.

Brain-Trust Equity

Equity that is accepted or earned through an individual’s contribution of information, ideas, or concepts to the strategic growth, development or direction of a company and its products, services or organizational structure.

Bribery

The act or practice of giving or accepting a something of value in exchange for a favor.

Broker

An individual or firm who acts as an intermediary between a buyer and seller, typically charging a commission.

Budget

An itemized prediction of an individual’s or business’s income and expenses expected for some period in the future.

Budget Deficit

The amount by which a business or individual’s spending exceeds its income over a specific period of time.

Business Model

A description of the operations of a business including the segments of the business; its functions, roles and relationships; and the revenues and expenses that the business generates.

Business Operations

Ongoing recurring activities involved in running a business in order to generate value for its stakeholders.

Business Plan

A document prepared by a company’s founder or management, or by a consultant on their behalf, that details the past, present, and future of the company, usually for the purpose of attracting capital investment.

Business Taxes

Taxes owed and paid by a corporate entity.

Buyer

In general terms, a person or entity who purchases some good or service from another.

Buyout

The purchase or acquisition of controlling interest in one corporation by another corporation, in order to take over assets and/or operations.

Capital

1. Cash or goods used to produce income either by investing in a business or a different income property.

2. The net worth of a company; that is, the amount by which its assets exceed its liabilities.

3. The money, property, and other valuables which collectively represent the value of an individual or business.

Capital Requirements

The amount of cash a business needs for its normal operations.

Carrying Cost

The total cost of holding inventory.

Cash Capital Disbursement

The repaying of a debt or expense.

Cash Flow

The movement of money into or out of a business.

Cash Flow Negative

When costs exceed income.

Cash Flow Positive

When income exceeds liabilities.

Cash Flow Statement

A summary of a business’s cash flow over a given period of time.

Cash Position

The amount of cash available to a company at a given point in time.

Class A Office Space

These buildings represent the highest quality buildings available. They are generally the most attractive buildings with the best construction, and possess high quality building infrastructure. Class A buildings also are well-located, have good access, and are managed by professionals.

Class B Office Space

One notch down from Class A quality, Class B buildings are generally a little older, but are still well-managed. Often, value-added investors target these buildings as investments, since well-located Class B buildings can be returned to their Class A status through renovation such as façade and common area improvements.

Closing a Sale

The resolute conclusion and completion of a sale. When one party agrees to pay, or pays, another for goods and/or services.

Collateral

Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default. Also called security.

Commission

A fee charged for a service in facilitating a transaction, such as the buying or selling of securities, goods or real estate.

Consumer

A person who buys products or services for personal use and not for manufacture or resale.

Contingency Plan

A plan devised for an outcome other than the one in the expected plan.

Contract

A binding agreement between two or more parties for taking action, or refraining from taking action, sometimes in exchange for lawful monetary or other consideration.

Controlling Interest

The ownership of a majority of a company’s voting stock; or a significant fraction, even if less than the majority, if the rest of the shares are not actively voted.

Convertible Debt

Security which can be converted for a specified amount of another, related security, at the option of the issuer and/or the holder. Also called convertible.

Corp.

The abbreviation for corporation.

Corporation

The most common form of business organization, which is given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern.

Cost-Effective

Giving adequate and favorable value when compared with the original cost.

Credentials

A tangible representation of qualification, competence, or authority issued to an individual by a third party with a relevant authority or assumed competence to do so.

Credit

The borrowing ability of an individual or company.

Credit History

A record of an individual’s or company’s past borrowing and repaying behavior.

Credit Line

An amount of credit extended to a borrower.

Credit Report

A report comprised of detailed information on a person’s credit history.

Credit Score

A numerically represented measure of credit risk calculated from a credit report using a standardized formula.

Credit Worthiness

A creditor’s measure of an individual’s or company’s ability to meet debt responsibilities.

Crowd Funding

Funding a business by raising many small amounts of money from a large number of people.

Debt

An amount owed to a person or organization for funds borrowed.

Debt Financing

Financing by selling bonds, bills or notes to individuals or businesses.

Debt Retirement

The repayment of a debt.

Debt-to-Income Ratio

A figure that calculates how much income is spent repaying debts.

Deduction

An expense subtracted from adjusted gross income when calculating taxable income. Also called tax deduction.

Depreciate

Diminish in value over a period of time.

Direct Cost

Cost of materials, labor related to the production of a product.

Discount

To sell anything below its normal price.

Distributor

An entity which buys from a producer and then sells and delivers merchandise to retail stores, or acts as an intermediary in business. Sometimes called a wholesaler or middleman.

Diversification

A portfolio strategy designed to reduce risk by combining a variety of investments, such as stocks, bonds, and real estate, which are unlikely to all move in the same direction.

Dividend

A taxable cash award declared by a company’s board of directors and given to its shareholders out of the company’s current or retained earnings, usually quarterly. Also used as a slang term to mean reward.

Double Taxation

Taxation of the same income at two levels. One common example is taxation of earnings at the personal income level and then again at the sales level.

Downsizing

Diminishing the total number of employees at a company through terminations, retirements, or spinoffs.

Economics

The study of how the forces of supply and demand assign scarce resources.

Economy

Activities related to the production and distribution of goods and services in a specific geographic region.

EFS

Acronym for Electronic Filing System.

Employee

A person hired to provide services to a company on a regular basis in exchange for compensation and who does not provide these services as part of an independently owned business.

Entrepreneur

An individual who starts his or her own business.

Equity

Ownership interest in a business in the form of common stock or preferred stock.

Equity Financing

Financing a business by selling common or preferred stock to investors.

Expansion

Growth.

Expenditure

A payment, or the guarantee of a future payment.

Expense

Any cost of conducting business.

Expense Report

A document that contains all the expenses that a business has incurred as a result of the business’s operation.

Fair Isaac Corporation

A publicly traded company that provides analytics and decision making services, including credit scoring, intended to help financial services companies make complex, high-volume decisions.

Fair Price

A price for a product or service that is comparable to fair market value.

Fee

A charge for products delivered or services rendered.

FICO

Acronym for Fair Isaac Corporation.

Financial Adviser

A person or organization employed by a business or mutual fund to manage assets or provide investment advice.

Financials

Documents related to finance.

Financing

Providing the necessary monetary capital.

Fixed Expense

An expense that does not change depending on production or sales levels, such as rent, property tax, insurance, or interest expense. Also called fixed cost.

Forecast

A prediction based on historic data and current knowledge used to estimate the direction of future trends.

Forfeiture

The act of forfeiting.

Free Market

Business governed solely by the laws of supply and demand, not restrained by government interference, regulation or subsidy.

Funding Request

A request for funding.

GAAP

See Generally Accepted Accounting Principles.

General Partner

A partner with unlimited legal obligation for the debts and liabilities of a partnership.

Generally Accepted Accounting Principles (GAAP)

A set of standards, conventions, and rules that accountants follow in recording and summarizing and in the preparation of financial statements.

Global Marketplace

All business-related transactions that take place between two or more regions, countries and nations beyond their political boundary.

Globalization

Processes of international integration arising from increasing human connectivity and interchange of worldviews, products, ideas, and other aspects of business culture.

Grant

Funds disbursed by the grantor to a recipient.

Gross Margin

A measure of profitability, often shortened to GM. To calculate divide Gross Income by Net Sales, and express it as a percentage. For example, a widget sells for $5 and costs $3 to make.

$5 (Net Sales) - $3 (Cost of Goods) = $2 (Gross Income).

Then 2 ÷ 5= 0.4, which expressed as a percentage is 40% Gross Margin.

Growth Rate

A measure of financial growth.

Growth Strategy

A plan of action based on investing in companies and sectors which are growing faster than their peers. Also can mean an organization’s plan for increasing, expanding, and otherwise getting bigger.

High-Net-Worth Individual

A person who owns considerable assets; usually used in connection with donations, loans and investments.

IFRS

See International Financial Reporting Standards.

Inc.

Abbreviation for incorporated.

Income

Revenues minus cost of sales, operating expenses, and taxes, over a given period of time.

Incorporated

A business that has been formed into a legal corporation by completing the required procedures.

Indemnity Bond

An insurance bond used as an additional measure of security to cover loan amounts, worth about 75 percent of the value of the property. This bond protects lenders from loss, in the event that the borrower defaults on the loan.

Indirect

Not directly caused by or resulting from something, as in indirect costs.

Initial Public Offering

The initial sale of stock by a company to the public.

Interest

The return earned on an investment.

Internal Revenue Service

The federal agency of the United States responsible for administering and enforcing the U.S. Treasury Department’s revenue laws, through the assessment and collection of taxes, determination of pension plan qualification, and related activities.

International Financial Reporting Statement (IFRS)

A common global accounting practice that is used in many countries worldwide.

International Securities Identifier Number

A exclusive international code which identifies a securities issue.

Investment Banker

An individual who acts as an underwriter or agent for businesses and municipalities issuing securities.

Investment Group

A group of investors who pool some of their money and make joint investments. Also called an investment club.

Investor

An individual who commits monetary capital to investment products with the expectation of financial return.

IPO

Acronym for Initial Public Offering.

IRS

Acronym for Internal Revenue Service.

ISIN

Acronym for International Securities Identifier Number.

Joint Venture

A contractual agreement joining together two or more entities for the purpose of executing a particular business undertaking.

Key Financial Driver

Unique to every company, any influencer that could materially affect a company’s finances.

Late Payment Fee

Commonly called a “late charge”, a fee charged to a borrower who misses paying at least their minimum payment by the payment’s deadline.

Legal Representation

An attorney. Also called a lawyer.

Lender

A person or organization who lends money.

Lending Portfolio

A collection of investments all owned by the same person or organization.

Leveraged Buyout

The takeover of a company or controlling interest of a company (a buyout), involving a significant amount of borrowed (leveraged) money.

Liability

An obligation that legally commits an individual or company to settle a debt.

Licensing

Under defined conditions, the granting of permission to use intellectual property rights, such as trademarks, patents, or technology.

Limited Liability Company

A type of company, authorized only in certain business sectors, whose owners and managers receive the limited liability and tax benefits of an S-Corporation without having to conform to S-Corporation restrictions.

Limited Partner

In a corporate entity with one or more general partners, limited partners are liable only to the extent of their investments. Limited partners also enjoy rights to the partnership’s cash flow, but are not liable for company obligations.

Liquidation

The process of converting assets or investments into cash.

Liquidity

The ability of an asset or property to be converted into cash quickly and without any price discount.

LLC

Acronym for limited liability company.

Loan

An arrangement in which a lender gives monetary capital or property to a borrower, and the borrower agrees to return the property or repay the monetary capital, usually along with interest, at some future point in time.

Manpower

The set of individuals who make up the workforce of an organization.

Manufactured Cost

The total cost of producing a product, including the direct labor costs, direct material costs, overhead costs, and any other expenses associated with production.

Market Analysis

Research intended to predict the expectations of a market.

Marketing Plan

A written document that illustrates the necessary actions to achieve one or more marketing objectives. It can be for a product or service, a brand, or a product line.

Market Share

The percentage of the total sales of a given type of product or service that is won by given company.

Market Test

A geographic region or demographic group used to gauge the applicability of a product or service in a marketplace, prior to a wide-scale launch.

Mentor

A more experienced or more knowledgeable person who helps to guide a less experienced or less knowledgeable person.

Merchant Banking

An investment bank which is well-equipped to manage multinational corporations. Commonly, electronic.

Middleman

Intermediary between two commercial entities, commonly a wholesaler or distributor who buys from a manufacturer and sells to a retailer or to consumer.

NDA

Acronym for non-disclosure agreement.

Negative Cash Flow

When costs exceed liabilities.

Net Profit

Actual profit after working expenses not included in the calculation of gross profit have been paid.

Non-Disclosure Agreement

A contract that prohibits the disclosure of confidential information or proprietary knowledge under specific circumstances.

Non-Profit Company

An organization created to accomplish specified goals but without the intention of making profits, unlike a commercial organization. Its shareholders or trustees do not benefit financially. Some nonprofits plow any potential profits back into their future budgets to avoid becoming profitable.

Offering

A general term for the output of a business; the goods or services it sells.

Operating Expense

An expense arising in the normal course of running a business, such as manufacturing, advertising and sales.

OPEX

Acronym for operating expense.

Opportunity Cost

The cost of passing up the next best choice when making a decision.

Outsourcing

Work executed for a business by people other than the business’s full-time employees.

Ownership Equity

The owner’s share of the assets of a business.

Partners

Members of a partnership, either general or limited.

Partnership

A relationship of two or more entities, people or companies, conducting business for mutual benefit.

Payment Bond

A surety bond through which a contractor assures an owner that material and labor provided in the completion of a project will be fully paid for, and that no mechanics’ liens will be filed against the owner.

Payment Terms

The conditions under which a seller allows a buyer to pay off the amount due in a transaction.

Performance Bond

A bond issued to guarantee adequate and acceptable completion of a project by a contractor.

Personal Finances

One’s private funds, property, possessions. The application of finance principles to the monetary decisions of a person or family.

Placement

The selling of new securities. Can also refer to temporary employment with a company.

Positive Cash Flow

When income is greater than costs.

Price Point

A point on a range of possible prices at which something might be marketed.

Principle

A rule or ethical standard.

Private Labeling

A retailer’s name, as used on a product sold by the retailer but manufactured by another company.

Private Placement

The sale of shares directly to an institutional investor, such as a bank, mutual fund, insurance company, pension fund, or foundation.

Private Placement Disclaimer

A disclaimer that specifies that the sale of securities directly to an institutional investor, such as a bank, mutual fund, foundation, insurance company, etc. does not require Securities Exchange Commission (SEC) registration, provided that the securities are purchased for investment purchases only, not for resale.

Product

The end result of the manufacturing process.

Productivity

The calculated amount of output per unit of input.

Profit

The positive gain from an investment or business operation after deducting all expenses.

Pro Forma

Description of financial statements that have one or more assumptions or hypothetical conditions built into the data. Often used with balance sheets and income statements when data is not available, to construct scenarios. One variety is called a Pro Forma Income Statement. Another is a Pro Forma Invoice.

Projections

Quantitative estimates of prospective economic or financial performance.

Promissory Note

A document signed by a borrower promising to repay a loan under agreed-upon terms. Also called a note.

Publicly Traded Company

A company with a fixed number of shares outstanding.

Ratio

The result of one value divided by another.

Ratio Analysis

The study and interpretation of the relationships between various financial variables, used often by investors or lenders.

Return on Investment (R.O.I.)

Benefit yielded by an investment when compared to its cost, usually expressed as a ratio or percentage.

Revenue

The total amount of money received by an organization for goods or services provided during a certain time period. Sometimes called turnover.

Risk

The quantifiable probability of loss or less-than-expected returns.

Risk/Reward

A calculated measurement of the degree of risk inherent in a given investment in relation to the potential profit associated with it.

R.O.I.

See Return on Investment.

S-Corporation

A type of corporation, recognized in the US by the Internal Revenue Service for most companies with 75 or fewer shareholders, which enables the company to enjoy the benefits of incorporation but be taxed as if it were a partnership. Also called Subchapter S Corporation, or S-Corp.

Sales

Total monetary amount collected for goods and services provided.

SBA

Acronym for the Small Business Administration in the US.

SBA Loan

A business loan issued by the US Small Business Administration.

S.E.C.

See United States Securities and Exchange Commission.

Selling Expenses

Costs associated with the sales process.

Service

A type of economic activity that is intangible, is not stored, and does not result in any kind of ownership. Examples are health care, training or entertainment.

Shareholder

One who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors. Also called a stockholder.

Small Business Administration

A US Federal agency which offers loans to small businesses.

Socioeconomics

Referring to social and economic conditions, social classes and income groups.

Sole Proprietorship

A company which is not registered with the state as a limited liability company or corporation and is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes.

Sponsorship

Financial or other support, often for a specific event, program, or project, that may give the sponsor an opportunity to advertise.

Stakeholder

Anyone who is interested in or affected by something; one who could benefit from information about it. Not to be confused with shareholders.

Start-Up

1. The beginning of a new company or new product.

2. A new, usually small business that is just beginning its operations, especially a new business supported by venture capital and in a sector where new technologies are used.

Start-Up Capital

The initial stage in financing a new project, which is followed by several rounds of investment capital as the project gets under way

Statement of Cash Flows

A summary of a company’s cash flow over a given period of time. Also called Cash Flow Statement.

Strategy

A planned system of action targeting a goal or outcome.

Subsidy

Financial aid given by the government to individuals or groups.

Supply Chain

All the elements that combine to transform raw input into something an end-consumer can buy, including materials, knowledge, people, technology, transporters, distributors, retailers, etc. Can apply to intangible as well as tangible items.

Surety Bond

A bond issued by an entity on behalf of a second party, guaranteeing that the second party will fulfill an obligation or series of obligations to a third party. In the event that the obligations are not met, the third party can recover its losses via the bond.

Sustainability

The capacity to endure.

SWOT Analysis

An assessment of an organization’s strengths, weaknesses, opportunities and threats.

Takeover

Acquiring control of a corporation, called a target, by stock purchase or exchange, either hostile or friendly.

Target Market

The selection of a market that will be the most advantageous segment in which to offer a product or service. Also called a market target.

Tax Implications

Conditions or actions that can affect the amount of taxes payable.

Taxes

A fee levied (charged) by a government on a product, income, or activity.

Terms

Related to sales, loans and payments, the conditions or obligations two parties agree to for a purchase; may include timing of payments, delivery, etc.

Time Management

The act or process of planning and exercising conscious control over the amount of time spent on specific activities, especially to increase effectiveness, efficiency or productivity.

Top Line

Refers to the first line of an income statement, generally reserved for gross sales or revenue. “Top-line” growth is synonymous with “revenue growth”.

Trade Show

A marketing, fair-like event at which goods and services in a specific industry are exhibited, demonstrated and sold.

Trading Platform

Software provided by a stock broker in order to buy and sell shares in the stock market.

Transparency

Conditions under which facts are fully and accurately disclosed in a timely manner.

True Cost

The bottom-line figure when information is collected and presented for each proposed alternative. Can also mean the fully loaded cost of an item.

Under-Capitalized

An entity that lacks sufficient operating capital to perform well.

Underwriting

The procedure by which an underwriter brings a new security issue to the investing public in an offering. In such a case, the underwriter will guarantee a certain price for a certain number of securities to the party that is issuing the security. Thus, the issuer is secure that they will raise a certain minimum from the issue, while the underwriter bears the risk of the issue.

United States Securities and Exchange Commission

An independent federal agency that oversees the exchange of securities in the United States to protect investors.

Variable Expense

A cost of labor, material or overhead that changes according to the change in the volume of production units. Combined with fixed costs, variable costs make up the total cost of production. Also called variable cost.

Venture Capitalist

An investor who engages in venture capital projects. Venture capitalists seek opportunities involving businesses that are growing or are in risky market segments, since these businesses generally have a harder time obtaining loans. Frequently called VCs.

Web-Based Business

A company that does most of its business on the Internet, usually through a website that uses the popular top-level domain, .com. Also called an Internet business, web business, dot-com company, or simply a dot-com.

Wholesale

The purchase of goods in quantity for resale purposes. Also called wholesale distribution.

Wholesale Distribution

See wholesale.

Working Capital

Current liabilities subtracted from current assets. Working capital measures the liquid assets a company has available to build its business.

Yield

The annual rate of return on an investment, expressed as a percentage.