Personal Finance Unit 4 Vocab

Working capital The money required to keep a business going.
Equity financing Selling common stock or preferred stock to investors in order to raise money.
Debt financing Money that you must pay back.
Current assets Cash and cash equivalents, inventories, and debtors.
Business plan A formal plan that sets out the future strategy and financial development of a business.
Marketing plan A plan that allows you to understand the marketplace and how you will tap into that market.
Operational plans Work plans that describe how a company will put its goals into action.
Project frameworks Project plans that describe the goals of a particular project, usually for a specified period of time (usually a fiscal year).
Elevator pitch A three minute summary of the business plan’s executive summary.
Oral presentation An often entertaining slide show and oral narrative that is meant to trigger discussion and interest potential investors in reading the written presentation.
Written presentation for external stakeholders A detailed, well written, and pleasingly-formatted plan targeted at external stakeholders.
Internal operational plan A detailed plan describing planning details that are needed by management but may not be of interest to external stakeholders.
Accounting The process of maintaining and checking the business records of an individual or organization and preparing forms and reports for tax or other financial purposes.
Financial accounting Concerned with recording, classifying, summarizing, interpreting, and communicating financial information about a business.
Management accounting Used within an organization and provides information for managers and employees to help them in performing their jobs.
Auditing The examination of financial records to make sure that they are authentic and correct.
Internal auditing Aims at providing information for management usage, and is typically carried out by auditors employed by the company, and sometimes b external service providers.
External auditing Done by an independent auditor who examines an organizations financial statements and accounting records in order to check the accountants adherence to Generally Accepted Account Principles (GAAP) or International Financial Reporting Standards (IFRS).
Debit An entry in a ledger showing a debt or expense in a record of accounts.
Credit An entry into a ledger showing money paid in a record of accounts.
Venture capital Money used to support new or unusual undertakings or speculative ventures.
Venture capital fund A pooled investment vehicle (often a partnership) that primarily invest the financial capital of third-part investors in enterprises that are too risky for the standard capital markers or bank loans.
Angel investors Persons looking to invest in companies for equity ownership.
Start-up company A business with a limited operating history, or in other words, a fairly new company.
Reserve capital An amount of money put aside or in reserve for unexpected expenses or evens.
Budgeting Itemizing and allocating your anticipated income and expenses.
Financial forecast The three primary financial statements (balance sheet, income statement, and cash flow statement) created within a business plan.
General ledger Sometimes known as nominal ledger; summary of all transactions that occur in the company.
Trial balance Listing of the account names and the sum of the account balances.
Net revenue Amount of money received by a company for goods sold or services rendered.
Expenses Amount of money spent on the company.
Balance sheet A statement that shows assets, liabilities, and equity of the company.
Cash flow statement One of the main financial statements that reports the cash generated and used during a time period.
Payroll A management tool designed to pay employees for goods and services produced.
Deductions The amount of money withheld from a paycheck.
Commission A fee paid to someone for providing a service, usually as a percentage of the total amount of the business transacted.
Hourly rate With this type of payment, an employee will only be paid for the hours worked.
Time tracking Keeping track of the hours and employee works.
Salary An amount paid yearly, which is then divided into weekly, biweekly, or monthly payments throughout the year.
Taxable income The amount of income on which you actually pay taxes.
Standard deductions Deductions just for living.
Personal exemption An amount of money a taxpayer can exclude from his personal income for each member of his household, as long as the member is not claimed as a dependent by anyone else.
Withholding The amount of an employee’s income that an employer sends directly to the federal, state, or local tax authority as partial payment of that individual’s tax liability for the year.
Voluntary deductions Pay for various benefits that he has chosen to participate in.
Payroll register Provides a summary of the payroll information for each pay period, and it lists employees who were paid during the pay period.
Employee earnings recod Provides the comprehensive history of the amounts earned by each individual employee during a calendar year.
Beginning inventory The amount of inventory at the end of the previous period
Ending inventory The amount of inventory at the end of the current reporting period
Purchases Inventories bought over the period anchored by beginning and ending inventory.
Cost of goods sold Describes the direct expenses incurred in producing the particular goods for sale.
Variable costs Expenses that change as conditions change.
Fixed costs Costs that don’t change.
Direct costs Costs that can be associated with a particular cost object.
Organic growth The rate of business expansion through increasing output and sales as opposed to mergers, acquisitions and take-overs.
Inorganic growth The rate of business, sales expansion, etc, by increasing output and business reach by acquiring new businesses by way of mergers, acquisitions, and take-overs.
Profit mapping Another term for profit planning. It is a systematic and holistic method for business improvement and managing execution.
Selling price The amount of money a consumer is asked to pay for something.
Target price The price at which a seller projects that a buyer will buy a product.
Target cost The maximum cost that the seller is willing to pay to have the product manufactured.
Margin of safety How much sales can fall before a business starts taking a loss.
Breakeven figure The minimum amount of sales necessary for the company to continue to operate.

Leave a Reply

Your email address will not be published. Required fields are marked *