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Financial Management
Unit 4: Financial Management
| Term | Definition |
|---|---|
| Assets | Items of value owned by a business |
| Balance Sheet | A financial statement that lists what a business owns, and how much it is worth at ta particular point in time. |
| Break-Even Point | Volume of sales that must be made to cover all the expenses of a business. |
| Cash Flow Statement | An accounting report that describes the cash that flows in and out of a business |
| Check Register | A book in which one records the dates, amount, and names of people to whom checks have been written. |
| Collateral | Property the borrower forfeits if he or she defaults on a loan. |
| Cost of Goods Sold | The cost of the inventory a business sells during a particular period. |
| Debt Capital | Money loaned to a business with the understanding that money will be repaid, with interest, in a certain time period. |
| Equity Capital | Money inverted in a business in return for a share in the business's profits |
| Fixed Costs | Fees that must be paid regardless of how much of a good or serivces is produced |
| General Journal | Used to record any kin of transaction |
| General Ledger | Used to post items that recorded in journals; ledgers separate transactions by account, allowing business |
| Gross Profits | Profit before operating expenses are deducted |
| Gross Sales | The Dollar amount of all sales, including returns. |
| Income Statement | A financial statement that shows a business's revenue, expenses and profit over a period of time usually a year. |
| Interest | An amount charged for borrowing money. |
| Inventory | The stock of goods a business has for sale |
| Journals | Accounting records of the business transactions made |
| Liability | Money owed to others |
| Margianl Benefit | A meusrement of the advantages of producing one additional unit of a good or serives |
| Markdown | An amount deducted form the retail price to determine the sales price |
| Markup | An amount added to the cost to determine the sales price |
| Net Profit Before Taxes | The amount remaining after costs of goods sold and operating expenses are subtracted from sales |
| Net Sales | The dollar amount of sales after returns have been subtracted |
| Operating Expenses | The expenses necessary to operate a business |
| Owners's Equity | The difference between assets and liabilities |
| Periodic Inventory Method | Involves taking a physical inventory of the merchandise |
| Perpetual Inventory Method | Keeps track of inventory level on a daily basis, using stock cards or a computer |
| Principle | Amount of money borrowed from a loan |
| Rate of interest | The percentage that is the basis for interest earned or paid |
| Reorder Point | A predetermined level of inventory when new stock must be purchased |
| Sales | The dollar value of goods and services a business gives to customers over a certain period of timE |
| Term | Number of years for which a load is extended |
| Variable Costs | Costs that go up and down depending on the quantity of the good or services produced |
| Venture Capitalists | Individual or companies that make profit investing in start-up companies |
Created by:
isai003
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