A
Account Payable
Money owed by a company to a supplier. Example: "I purchased $20,000 of beauty supplies for my big sidewalk sale. My supplier gave me 60 days to pay for this huge order. That $20,000 is now an Account Payable for my company. The supplier trusts me to pay this account payable on the terms we agreed to."
Bond
A loan. A bond is security that investors buy and sell, that represents a legal obligation from the company issuing the bond that they will repay the funds they received when they issued the bonds.
Capital
Expenditures
Expenditures
on
equipment
the
business
will
use
for
many
years.
Conflict
of
Interest
A
situation
in
which
an
individual
might
take
an
action
to
his/her
advantage
that
would
be
to
the
disadvantage
of
a
person
or
company
that
believes
this
individual
is
serving
them.
Example:
a
customer
tells
a
supplier
in
confidence
that
they
are
buying
a
large
quantity
of
a
specific
product
to
advertise
a
major
sale
in
two
weeks.
It
would
be
a
conflict
of
interest
for
that
supplier
to
go
to
competitor
stores
and
use
this
information
to
get
them
to
buy
more
of
this
product
and
put
it
on
sale
immediately.
Contribution
Margin
Unit
price
minus
cost
of
goods
sold.
Account Receivable
Money owed by a customer to a company. Example:"I sold the new computer system to my client for $20,000. They made an initial payment of $1,000 and now owe me $19,000, which they've promised to pay in 30 days. That $19,000 is an Account Receivable for me. I trust the Customer to pay this account receivable on the terms we agreed to."
Breakeven Analysis
A determination of how many units are needed to sell in order to pay for all fixed costs. Example 1: "That equipment costs $4,000. The contribution margin for each item it makes is $10. I will need to sell 400 items to breakeven on that investment." Example 2: "My overhead expenses are $50,000. The contribution margin on each item I sell is $50. I will need to sell 1,000 items for my company to breakeven."
Cash
Flow
Cash,
publicly
traded
stocks,
government
bonds
or
corporate
bonds
that
can
be
quickly
turned
into
cash.
Cash
Instruments
can
be
turned
into
cash
at
values
that
are
predictable
and
available
to
all
holders
of
the
cash
instrument.
Example:
"Apple
stock
is
a
cash
instrument
because
it
can
be
sold
and
converted
into
cash
immediately,
and
the
amount
anyone
would
get
for
that
Apple
stock
is
the
same
-‐
the
price
of
the
stock
at
that
moment
in
the
stock
market."
Corporate
Social
Responsibility
Actions
entrepreneurs
and
companies
take
that
go
beyond
their
financial
self-‐
interest.
These
actions
are
voluntary
but
often
reflect
the
personal
beliefs
of
business
leaders
about
what
their
companies
can
or
should
accomplish.
Many
companies
tie
the
actions
they
take
for
corporate
social
responsibility
to
initiatives
that
benefit
their
business.
Example:
the
local
pet
store
promises
to
donate
$1
to
the
local
animal
shelter
for
every
pet
owner
who
buys
the
pet
food
they
have
on
sale
over
a
weekend.
geaux BIZ
Portal
A
computer
portal
offered
by
the
Louisiana
Secretary
of
State
that
enables
entrepreneurs
to
go
to
a
single
source
to
learn
which
forms
they
need
to
file,
to
file
the
forms
required
by
the
Secretary
of
State,
and
to
determine
which
other
government
agencies
they
may
need
to
interact
with.
Angel Investors
Individuals that make small investments in an enterprise or to support an entrepreneur where they do not Expect an immediate or large return on investment. Angel Investors are typically “friends and family,” individuals who know the business owner and want the owner to succeed. Angel Investors typically provide small amounts of equity with no expectation of a large return.
Brokerage
A
company
that
provides
individuals
and
companies
with
access
to
financial
markets.
Example:
"I
buy
stocks
and
bonds
from
my
broker."
Collateral
Equipment,
inventory
or
other
goods
that
are
pledged
to
the
bank
in
the
case
the
company
can
not
make
a
loan
payment.
Extended
Payment
Terms
An
option
a
supplier
might
grant
a
company
to
pay
their
bills
later
than
they
normally
would.
Example:
"I
usually
have
to
pay
my
supplier
within
30
days
of
receiving
their
goods.
But
if
I
order
extra
for
a
big
sale
that
features
their
product
my
supplier
gives
me
extended
payment
terms
-‐
60
days
-‐
so
I
don't
run
out
of
money
before
the
sale."
Go
/
No
Go
The
decision
point
at
which
an
entrepreneur
makes
the
final
decision
on
whether
or
not
to
launch
a
new
enterprise
or
abort
the
effort
due
to
unfavorable
market
research
or
pro
forma
projections.
Assets
Something of value. Anything owed is an asset. Assets can be something big (like a house) or something small (like a piece of jewelry). A security is a financial asset, meaning a piece of paper that represents ownership and is worth money.
Business
Ethics
Proper
business
behavior
beyond
complying
with
legal
requirements.
A
simple
rule
guides
business
ethics,
the
same
basic
rule
that
should
guide
all
human
behavior:
act
towards
your
stakeholders
as
you
would
hope
they
would
act
towards
you.
Comfort Engaging with Strangers
The
ability
to
interact
in
a
friendly
and
effective
way
with
unfamiliar
people.
The
ability
to
seem
welcoming
and
easy
to
talk
to,
even
with
people
who
are
different
in
age,
appearance
or
background.
Fiscal
Year
The
12
month
period
a
company
uses
to
report
financial
results.
A
fiscal
year
can
be
the
same
as
a
calendar
year
(January
through
December),
or
any
other
12
month
period
that
makes
sense.
Example:
a
gift
store
chain
sells
most
of
its
items
during
the
Holiday
season
and
then
in
clearance
sales
during
January.
Therefore
the
gift
store
chain
uses
a
fiscal
year
of
February
1
-‐
January
31
so
that
its
year-‐end
accounting
doesn't
interfere
with
its
selling
efforts.
Grit
An
individual’s
self-‐commitment
to
overcome
obstacles
to
achieve
long-‐term
goals.
The
ability
to
keep
pursuing
your
dream
despite
challenges
and
defeats.
Perseverance,
resilience
and
backbone.
Bank Loan
Debt from a bank. Banks require much more information from potential borrowers, and take more time to make a lending decision based on a great deal of analysis. Therefore bank loans are less expensive than online lines of credit.
Capital
(or
Equity)
Funds
contributed
by
investors
to
a
business.
Investors
contribute
capital
to
a
business
because
they
expect
a
significant
return
on
their
investment
when
the
business
succeeds.
Commission
Money
earned
when
something
is
sold.
Example:
the
real
estate
agent
who
sells
you
a
house
is
paid
a
2%
commission
on
the
value
of
the
house
sold.
Fixed
Costs
Costs
that
do
not
vary
based
on
the
units
sold
by
enterprise.
Fixed
costs
are
often
incurred
at
the
start
of
the
enterprise,
before
it
is
known
how
well
the
enterprise
will
perform.
Example:
when
you
sign
your
lease,
your
store
rent
is
now
a
fixed
cost
that
will
not
vary
based
on
how
many
units
you
sell.
Guarantor
A
credit-‐worthy
individual
or
business
with
sufficient
liquidity
that
promises
to
repay
a
loan
in
the
event
that
the
debtholder
can't
make
a
required
payment.