Intro to Business- Chapter 7

profit and loss statement

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time

debt

A generic term to describe any type of non-equity funding tied to the business

credit card

Card entitling one to revolving credit that is not tied to any particular asset, does not have a set repayment schedule, typically has a set upper limit, and is usually tied to a much higher interest rate than that of a bank loan.

loan

Contractual agreement whereby the firm receives some amount of money that must be repaid over a specified period of time at a specified interest rate.

crowdfunding

Funds received by a business by soliciting a large number of very small investors usually via the Internet

equity investment

Funds received by a business in exchange for a percentage ownership of the business.

business angels

High-net-worth individuals who invest in businesses not as a business, but as an individual. Ex: Marcus Limones

grants

Special funds that do not require repayment and are designed to aid businesses in specific areas.

shrinkage

The difference between what is sold and what was brought into the business

asset-based lending

A loan provided for the purchase of a necessary asset for the business

factoring

Accounts receivable that are sold at a discount to another company to receive immediate cash

asset lease

A form of lease tied to a particular asset used by a business to conserve cash and maintain the latest versions of whatever equipment is available

venture capital fund

A fund that is organized to make significant equity investments in high-growth new ventures

supplier credit

Another form of non-equity funding that is available. Suppliers often will provide credit on both physical assets (refrigerators, molding equipment, etc.) and the actual supplies provided.