Expense it
Expense that does not change when sales or production volumes increase or decrease.
Fixed Expense
A 12-month accounting period that a business uses for financial and tax reporting purposes
A Fiscal Year
This is a type of small loan that is ideal for start-up companies because it doesn’t require much capital or an extensive credit history.
Microloan
Venture capital is typically a source of which type of financing?
Equity Financing
Total of all costs associated with making a product.
Cost of Goods Sold
The cost of operations that a company incurs to generate revenue.
Expense
The money a company's customers owe for goods or services they have received but not yet paid for
Accounts Receivable
The major source of debt financing is a
Bank
Length of time it takes to recover the cost of an investment
Payback
Total cost and total revenue are equal
Break Even
Expenses that change based on how much a company produces and sells.
Variable Expense
Any amount owed by a small business owner that eventually will need to be paid.
Accounts Payable
The money raised to begin developing an idea for a business or a new product.
Seed Money or Startup Capital
The one-time investment of starting a business is called
Start-up Investment
If your business sold soft drinks to grocery stores by the pallet, what is your unit of sale?
One Pallet of Drinks
A payment that an employee makes based on a sale
Commission
subtracting total liabilities from total assets equals?
Owner's Equity
Example: Getting by without any start-up costs at all
Bootstrapping
Start up investments should include
Start up expenditures, emergency fund, and 3 months of fixed expenses
A balance sheet includes
Assets, Liabilities, and Owner's Equity
The money left over from sales after paying all variable expenses associated with producing a product.
Contribution Margin
Assets = Liabilities + Owner's Equity
Accounting Equation
A person or company to whom money is owed.
Creditor
Borrowing money that needs to be paid back when starting up a business is called
Debt Financing
Cash Inflow – Cash Outflow = Net Cash
Cash Flow Equation