Personal Finance Unit 4 Vocab

Start-up company

A business with a limited operating history, or in other words, a fairly new company.

Internal operational plan

A detailed plan describing planning details that are needed by management but may not be of interest to external stakeholders.

Written presentation for external stakeholders

A detailed, well written, and pleasingly-formatted plan targeted at external stakeholders.

Commission

A fee paid to someone for providing a service, usually as a percentage of the total amount of the business transacted.

Business plan

A formal plan that sets out the future strategy and financial development of a business.

Payroll

A management tool designed to pay employees for goods and services produced.

Marketing plan

A plan that allows you to understand the marketplace and how you will tap into that market.

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.

Balance sheet

A statement that shows assets, liabilities, and equity of the company.

Elevator pitch

A three minute summary of the business plan's executive summary.

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.

Net revenue

Amount of money received by a company for goods sold or services rendered.

Expenses

Amount of money spent on the company.

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.

Reserve capital

An amount of money put aside or in reserve for unexpected expenses or evens.

Salary

An amount paid yearly, which is then divided into weekly, biweekly, or monthly payments throughout the year.

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.

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.

Profit mapping

Another term for profit planning. It is a systematic and holistic method for business improvement and managing execution.

Current assets

Cash and cash equivalents, inventories, and debtors.

Financial accounting

Concerned with recording, classifying, summarizing, interpreting, and communicating financial information about a business.

Direct costs

Costs that can be associated with a particular cost object.

Fixed costs

Costs that don't change.

Standard deductions

Deductions just for living.

Cost of goods sold

Describes the direct expenses incurred in producing the particular goods for sale.

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).

Variable costs

Expenses that change as conditions change.

Margin of safety

How much sales can fall before a business starts taking a loss.

Purchases

Inventories bought over the period anchored by beginning and ending inventory.

Budgeting

Itemizing and allocating your anticipated income and expenses.

Time tracking

Keeping track of the hours and employee works.

Trial balance

Listing of the account names and the sum of the account balances.

Debt financing

Money that you must pay back.

Venture capital

Money used to support new or unusual undertakings or speculative ventures.

Cash flow statement

One of the main financial statements that reports the cash generated and used during a time period.

Voluntary deductions

Pay for various benefits that he has chosen to participate in.

Angel investors

Persons looking to invest in companies for equity ownership.

Project frameworks

Project plans that describe the goals of a particular project, usually for a specified period of time (usually a fiscal year).

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.

Equity financing

Selling common stock or preferred stock to investors in order to raise money.

General ledger

Sometimes known as nominal ledger; summary of all transactions that occur in the company.

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.

Taxable income

The amount of income on which you actually pay taxes.

Ending inventory

The amount of inventory at the end of the current reporting period

Beginning inventory

The amount of inventory at the end of the previous period

Selling price

The amount of money a consumer is asked to pay for something.

Deductions

The amount of money withheld from a paycheck.

Auditing

The examination of financial records to make sure that they are authentic and correct.

Target cost

The maximum cost that the seller is willing to pay to have the product manufactured.

Breakeven figure

The minimum amount of sales necessary for the company to continue to operate.

Working capital

The money required to keep a business going.

Target price

The price at which a seller projects that a buyer will buy a product.

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.

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.

Financial forecast

The three primary financial statements (balance sheet, income statement, and cash flow statement) created within a business plan.

Management accounting

Used within an organization and provides information for managers and employees to help them in performing their jobs.

Hourly rate

With this type of payment, an employee will only be paid for the hours worked.

Operational plans

Work plans that describe how a company will put its goals into action.