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.