Accountant - A professional individual capable of setting up and keeping books; business records as well as managing them.

Accounts Payable - The moneys that a business owes to its suppliers of goods and/or services.

Accounts Receivable - The moneys that are owed to a business from the sale of goods and/or services.

Accrual Based Accounting - An accounting system that shows the sale, cost or other event when it actually occurs instead of when money changes hands. What is important is the contracting of the event rather than the receipt of payment for the event.

Administrative Expenses - These expenses include salaries, office supplies, telephone, rent, electric, and depreciation of office equipment.

Acid Test Ratio - The acid test ratio may be the most important test that a potential lender uses to determine whether or not a business will be able to meet in financial obligations. The ratio is cash plus other assets that can be immediately converted to cash divided by current liabilities.

Amortization - The process of paying off a debt over the period of its economic useful life thru a schedule of payments.

Analysis - An examination of an idea or situation to determine a better understanding.

Articles of Incorporation - A state legal document that outlines the purposes and regulations for a corporation.

Assets - Anything of value that is owned.

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Back-End Selling - The selling of additional products and/or services to existing customers.

Bad Debt - Un collectable moneys that are owed to the business.

Balance - The remaining money in an account.

Balance Sheet - An itemized breakdown which lists the total assets and total liabilities to display the net worth as of a given date and time.

Board of Directors - The individuals that the stockholders elect who work together to manage the business.

Bookkeeping - The system of recording the dollar amounts of business transactions to develop detailed accounting records.

Branding - The process of developing a name, trademark or design that differentiates a product or service from other products and services.

Break even Analysis - A way of determining at which point a business will break even that is not showing a profit and not showing a lose.

Budgeting - The matching and planning of income or revenues with expenses or overhead over a period of time.

Business Plan - A detailed written document that explains and describes its business, objectives, environment, strategies, marketing, competition, operating procedures, personnel requirements, business insurance and financial projections.

Business Venture - The undertaking of a commercial enterprise that may involve financial risk.

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Capital - Accumulated fixed and personal property and liquid assets available for a business venture.

Capital Budget - A budget that details the purchase of capital items such as buildings, leasehold improvements and equipment.

Cash - Actual moneys that are immediately available.

Cash Basis Accounting - A system where the transfer of cash controls the recording of sales and expenses.

Cash Discount - A reduction of an amount receivable because of an earlier payment than otherwise required.

Cash Flow Analysis - The tracking of the actual moving of cash in and out of a business, that is, cash in and cash out.

Cash Receipts - Moneys received from customers.

Collateral - Assets of a business that are assigned to a lender to help secure and outstanding debt.

Contract - An agreement involving the mutual responsibilities of two or more parties.

Corporation - An organization which becomes a legal business entity and formed under a state's statute for the purpose of carrying on a business enterprise in such a way to make the enterprise distinct from the individuals who control it. The corporation may be for or not for profit.

Cost of Goods Sold - Costs directly related to the manufacturing or fabrication of products sold. This usually includes base materials, building costs, equipment costs and other related overhead expenses.

Cost of Services Sold - Cost directly related to the providing of a service to a customer. This usually includes all related expenses incurred to provide the services.

Current Assets - Cash and cash equivalents, securities and accounts receivables and other assets of the business that can be liquidated quickly within a year.

Current Liabilities - Amounts due and payable by the business in less than a year.

Current Ratio - The ratio of a business's current assets to its current liabilities or current assets divided by current liabilities.

Customer Profile - Determination of the different characteristics and habits of a typical customer of a business.

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Debit - It is a accounting entry reflecting money spent or to be spent by the business depending of whether cash or accrual accounting is elected.

Debt - Money that is owed.

Debt Capital - That part of a business's capital that must be borrowed.

Debt Financing - The use of borrowed money to finance a business.

Demographics - Determining the value of customers by age, sex, income, occupation, education and other factors.

Depreciation - A deterioration of value, which is a normal expense and must be considered do to a reduction in value due to age, wear or deterioration. Government regulations and laws determine the time and manner that may be used for depreciation.

Due Diligence - A legal responsibility to checking out an investment as to worthiness in relationship to stockbrokers and other financial professionals. The requirements can be very broad and vast and varied in order to qualify as having done due diligence.

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Entrepreneur - A individual who develops a business opportunity to introduce a new product, process or service and who raises the necessary money and recruits the necessary talent to develop and promote the same.

Equity - The remaining value after all related liabilities have been deducted from a particular asset or assets.

Equity Financing - The securing of capital from an investor whereby they become part owners of the business.

Executive Summary - That section of a business plan, which briefly describes the major components that will be detailed in the rest of the business plan. It should basically describe the who, what, when, where, why and how of the business plan.

Exit Program - The process that an investor would use to exit a business by turning his investment into cash.

Factoring - This occurs when a supplier sells its accounts receivables to a particular financial expert called a factor. The factor immediately pays the amount of the receivables less a discount and receives the payments when they arrive from the customers. This is a crucial part of finance operation for many businesses.

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Financial Reports - Reports that give data about assets, liabilities, revenue and expenses at a given time.

Financial Statement - A written presentation that normally includes a balance sheet, profit and loss statement and a cash flow statement.

First In First Out (FICO) - A way to determine the value of inventory that takes into account that the goods first acquired are the goods first sold. This seems to be the most commonly used method because it takes into consideration the physical movement of the inventory.

Fiscal Year - Usually consists of a 12 month period that can really begin and end on any calendar date and establishes a beginning and a end for that company's accounting, planning and tax purposes.

Fixed Assets - Buildings, leasehold improvement, equipment and machinery and vehicles that are owned by the business.

Fixed Costs or Fixed Expenses - Those business costs that do not fluctuate from one time period to the next.

Forecasting - The way of calculating the future of a business's financial success in terms of reasonable probabilities.

Franchise - A legal arrangement that contractually obligates one business to follow and operate on another company's procedures and operating guidelines.

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Gigabyte - One billion bytes.

General and Administrative Expenses - Expenses directly related to the management of the business and not the fabrication or the selling of the product.

Goal - Referring to the objectives of the business, which can be short or long term.

Gross - Grand total before deductions

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Hit - Referring to the activity from the browser to the server; for example, if a web site has a page that contains text and two graphics and that page is visited that would equal three hits.

Host - When a computer makes itself available for another computer to access information or files.

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Income Statement - The financial report that displays total moneys in and total moneys out in detail.

Industry Life Cycle - The entire duration or cycle or history of a business from its earliest stages to its eventual decline.

Intangible Assets - Assets such as patents, copyrights, trademarks and branding etc.

Interest - That amount of money that is required to be paid back over and above the principal that is owed.

Inventory - Assets held by a company that are not yet sold. It can include raw materials, partially completed products and fully completed products.

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Joint Venture - A business venture involving two or more persons or businesses.

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Last-In and First-Out (LIFO) - Determining the value of inventory on the basis that the units most recently acquired are the first units that are sold.

Lease - Rental agreement as opposed to a contract for purchase.

Letter Of Credit - A banking instrument given to a person or business to place the credit of the bank in place of the credit of a person or business. Letters of credit often show a dollar limit that the letter of credit may be used.

Leverage - Using borrowing to increase the ability for the business to operate or conduct business.

Limited Liability Corporation (LLC) - Legal business entity that is similar to an S Corporation but does provide limited liability to the owners and provides different ways that the owners can divide up the profits.

Liquidate - Converting an asset into cash.

Liquidity - The ability that a business has to turn assets into cash.

Loan - Money borrowed at interest or without interest.

Logistics - The study of the ability that a business has to move inventory from one location to another.

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Management - The ability that a company has to control and guide its business.

Mission Statement - A statement of a company's operation, market position and competitive advantages.

Market - That which represents the total number of people and their spending capability for your services or products within the area that you are able to provide your services or products.

Market Analysis - Evaluation of the different factors of a market and the measurement of that market's ability to buy products and services.

Marketing - Satisfying the needs of customers through identification, information and persuasion.

Marketing Plan - The combination of information from a market analysis and the implementation of a marketing strategy to advance a business.

Market Share - That portion of total sales including your competitors and your sales combined in relation to your participation of the total sales in that market represented as a percentage.

Marketing Strategy - The way that a company promotes its business to successfully gain and maintain the business from its customers.

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Net Profit After Taxes- Total revenue less all expenses less interest and less all taxes.

Net Profit Before Taxes - Total revenue less all expenses less interest.

Net Worth - The net value of assets minus liabilities.

Nonrecurring - One time not repeating, as in nonrecurring expenses which are normally only at the start up of a business.

Notes Payable - An obligation for a business to pay in a form of a promissory note incurred by the business. Notes payable are added to the liability section of a company's general ledger.

Notes Receivable - Money that is owed to a business in the form of a promissory note promising payment to a business. Notes receivable are placed in the assets section of a company's general ledger.

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Objectives - The eventual goal that a company is striving to reach. Objectives are long term.

Operating Expenses - Excluding expenses associated with the fabricating or provision of the actual goods or services, these expenses involve administrative, research and selling costs.

Operations - Activities of the business broken down into daily, weekly or monthly.

Outsourcing - Taking a portion of your business and assigning it to an outside provider. This is normally done to reduce expenses associated with back up for that particular portion of the business.

Positioning - A marketing activity that makes a place for a particular product or service as it relates to the competition as in the fastest or the largest

Preferred Stock - Stock within a corporation that is given preferential treatment as it pertains to dividend payments.

Profit - When total revenues exceed total expenditures.

Profit and Loss Statement - Same as income statement, this statement displays revenues and expenses and the difference between the two.

Profit Margin - Taking the selling price of a product or service and deducting all costs relating to the fabrication and provision of that product or service.

Pro Forma - A document displaying a projection of future activity of a business with income projections presented. A pro forma financial statement uses assumptions that current actual operations will produce a projected financial result .Public Offering - When a corporation offers a portion of its shares or stock to the public to obtain capital.

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Quick Ratio - Cash plus Accounts Receivable divided by Current Liabilities.

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Rate Of Return - Normally expressed as a percentage, this is the amount that an investor has received over and above the amount invested in a company, that is, return divided by total amount invested.

Reorganization - A forced process due to financial problems almost to insolvency whereby the actual corporate structure is compelled to undergo a dramatic change.

Retained Earnings - That amount of capital that is retained in a business and not paid out as dividends to stockholders.

Return on Equity - Profit of a company divided by the total equity in the company expressed as percentage.

Return on Investment (ROI) - Profit divided by invested capital.

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Securities and Exchange Commission - A commission of the government that is in charge of overseeing the organization and regulation of the stock and securities exchanges.

Small Business Administration (SBA) - A US government agency that primarily guarantees lenders that loans made to small businesses will be paid. The SBA can also be a direct maker of a loan.

Sole Proprietorship - A legal business entity where there is individual owner of the business who is not incorporated and has not taken on a partner and who has taken on personal liability of his or her business.

Strategy - The method or plan used to implement and achieve a business objective.

Sub Chapter S Corporation - A corporation whose share holders have agreed to pay taxes directly on all of the earnings. Another name for a Sub Chapter S Corporation is a Tax Option Corporation. On this type of corporation there is no corporate tax on its income and all expenses are proportionally deducted by each of its shareholders.

Subordinated - Term used in relationship to the advancing of a position of a debt either ahead or behind another debt.

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Take Over - The acquisition of one business by another business.

Target Market - The focusing on specific individuals or groups to acquire more potential customers.

Tariff - A form of additional payment added to imports and exports also known as a duty.

Terms of Sale - That which is determined in a purchase as to specific aspects of a purchase.

Trade Credit - The permission that is given to a business to buy from its suppliers on an open account.

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Unsecured Loan - Borrowed money that is not backed by any collateral or security to guarantee payment.

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Variable Expenses - Those expenses that fluctuate as in utility, material and other varying expenses.

Variances - For our purposes, a determination for accounting displaying the difference between what was forecasted and what actually happened.

Venture Capital - Money invested by private individuals primarily to assist in the start up of a company.

Vision Statement - Also known as objective of a business, primarily what a company hopes to achieve as a long term goal.

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Working Capital - The amount of money that a business has in available cash, which is, also expressed as current assets minus current liabilities.