FS MGMT II - TERMS 2

the efficient utilization and adequate regulation of assets, revenue, expenditures, and capital rights

a language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data

recording in each fiscal period applicable expenses, whether paid or not, and income earned, whether collected or not

an accounting practice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid

a formal written statement, which may be based upon adjusted historical data, of management's plans for the future expressed in financial terms

the business function of effectively obtaining and using funds

an owners financial interest in a business

difference between currect assets and current liabilities

long-term capital invested in the business; also, funds invested in such long-term assets as: land, building, machinery, furniture, fixtures, and other equipment

capital invested in the business by the owner(s)

any borrowed or loaned capital invested in the business that must be repaid to creditors

private investors who are willing to supply financing for new and/or risky small venture start-ups

anyone that invests in, or financially sponsors, a new business

an understanding between a bank and the business indicating the maximum amount the bank is willing to loan the borrower

a line of credit that may be used over and over again up to a cetrain borrowing limit

a loan secured by the mortgage on property

a claim given by the borrower to the lender against the borrower's property in return for a loan

the principal government agency concerned with the financing, operation, and management of small businesses

obtaining cash before payments are received from customer's by selling off one's accounts receivables to a third party

Property of monetary value owned by the business

any debts that a business owes

coins, currency (paper money), checks, credit card receipts, and money orders received from others, as well as money deposited in the bank

an unwritten promise by a customer to pay, at a later date, for goods sold or services rendered

a written promise of a customer to pay the business a sum of money at a future date

property of a relatively permanent nature used in the operation of a business and not intended for resale

the point at which total sales revenue equals total costs

a cost that, for a given period of time and range of activity called the "relevant range", does not change in total but becomes progressively smaller on a per-unit basis as volume increases.


These do not increase with increased business, nor do they decrease with declining business activity

generally considered to be compensation for managerial or administrative services, expressed in terms of a month or year

the loss in value of a fixed asset due to wear and tear and the passage of time;


or a method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life

a cost which is uniform per unit but fluctuates in a total in direct proportion to change in the related activity or volume

a type of asset that will be consumed as it is used

a form of compensation for skilled and unskilled labor, expressed in terms of hours, weeks, or pieces completed

a federal act imposed on each employer for the purpose of financing the administration costs of the federal and state unemployment compensation programs

State unemployment tax act

a federal act which requires most employers and employees to pay taxes to support the federal social security program

a tax levied on individuals and businesses by federal, state, and local governments

a tax imposed on tangible personal property sold at retail

any cost no specifically associated with production of identifiable products and services;

expenses incurred in the normal operation of a business

a comparison of profit and each item of expense in the income statement expressed as a percentage of sales income;


these can be compared to the industry standard in regards to measuring the possible growth of the business

a formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period

a formal financial statement illustrating the assets, liabilities, and owner's equity of a business as of a specific date

measures the ability of the firm to meet its current obligations

the current assets divided by the current liabilities and a measure of the liquidity of the business

cash or other assets that will be converted to cash or consumed within one year

debts of a business that are generally paid within one year

quick assets divided by current liabilities

cash, marketable securities, accounts and notes receivable

the ratio of net income to owner's equity in the business

the difference between gross profit and expenses when gross profit is larger

measures how efficiently a firm is utilizing its assets

measures how many times per year accounts receivable are collected

measures the average time required to collect accounts receivable

the number of times the average inventory has been sold or used up (turned over) during a period

measures the average time required to sell inventory

provides evidence concerning the earnings potential of a company and how effectively the firm is being managed

net income divided by net sales

sales minus sales returns and allowances minus sales discounts

net sales minus the cost of goods sold

gross profit divided by net sales