Money
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.
What is Account Payable
Failure to repay a loan.
what is Default
The exact customers and market sector the business intends to serve.
Target market
Costs that vary based on the units sold by your enterprise.
Variable Costs
Costs that vary based on the units sold by your enterprise.
Variable Costs
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.
What is Account Receivable
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.
Extended Payment Terms
Working with others to address a challenge. Individuals using their skills in harmony with others to complete a task. Effective teamwork involves trust among team members. Collaboration and cooperation.
Teamwork
Unit price minus cost of goods sold.
Profit per Unit
Fixed costs plus variable costs. If the enterprise sells more than one type of unit, Total Costs equal the sum of fixed costs and the sum of variable costs (or cost of goods sold) for each type of unit.
Total Costs
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?
What is Breakeven Analysis?
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.
Angel Investors
A company that provides a good or service to another company. Example: "The beauty products distributor is my supplier -‐ I buy the hair care products I sell to my customers from my distributor."
Supplier
A company that provides a good or service to another company. Example: "The beauty products distributor is my supplier -‐ I buy the hair care products I sell to my customers from my distributor."
Supplier
Costs that vary somewhat based on the number of units you sell. Example: if your enterprise buys an iPhone you won’t have to pay again for apps you already own.
Semi-‐Variable Costs
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.
What is Cash Instruments?
Something of value. Anything owned 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.
Assets
All people or companies associated with an enterprise. Stakeholders include internal stakeholders (employees and shareholders/owners) as well as external stakeholders (customers, suppliers, community members).
Stakeholders
Shares of ownership in a company. Stock is a general term of ownership in any company. Example: if investors say they own stocks, they are generally referring to their overall ownership in one or more companies.
Stocks
How a business moves a specific customer to buy their service or offering. Example: a special event in a store's parking lot featuring discount prices is selling.
Selling
The fire damage to my inventory was a covered loss -‐ the insurance company paid my claim after I paid for my deductible. I had to close my store for a week -‐ the business I lost because my store was closed cost me another $20,000, but that was not a covered lost because my fire insurance policy did not cover a business interruption claim.
What is Covered Loss?
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.
Bank Loan
An individual or company that owns shares in a company.
Shareholder
One of the equal parts into which a company's capital is divided, entitling the holder to a proportion of the profits. Share refers to the ownership certificates of a particular company.
Share
Costs that make up one unit of what you sell. These can be labor costs as well as material costs. Example: when you sell a hat, the variable costs include: a) the hat’s material; and b) the labor cost required to make the hat.
Cost of Goods Sold