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Unit 4
Financial Management
| Term | Definition |
|---|---|
| Assets | items of value owned by a business |
| Balance Sheet | Lists what a business owns, what it owes, and its worth |
| Break-Even Point | Volume of sales that cover all expenses |
| Cash flow statement | describes the cash that flows in and out of a business |
| Check register | Records dates, amounts, and names of people to whom checks have been written |
| Collateral | property forfeited by the borrower if defaulted on a loan |
| Cost of goods sold | The cost of the inventory sold during a given period |
| Debt capital | money loaned to a business that must be repaid, with interest, in a given period |
| Equity capital | money invested in a business in return for a share in the business' profits |
| Fixed costs | fees that are to be paid regardless of how much a good/service is produced |
| General journal | records any kind of transaction |
| General ledger | posts items that are recorded in journals, separates by account |
| Gross profit | profit before operating expenses are deducted |
| Gross sales | dollar amount of all sales, including returns |
| Income statement | financial statement that shows revenue, expense, and profit over a given time of a business |
| Interest | amount charged for borrowing money |
| Inventory | stock of goods a business has |
| Journals | accounting records of transactions |
| Liability | money owed to others |
| Marginal benefit | measures advantages of producing one additional unit of a good/service |
| Markdown | deducted from the retail price to determine the sales price |
| Markup | added to the cost to determine the sales price |
| Net profit before taxes | what is left after costs of goods sold and operating expenses are deducted |
| Net Sales | dollar amount of all sales after returns are deducted |
| Operating expenses | expenses needed to operate a business |
| Owner's equity | the difference between assets and liabilities |
| Periodic inventory method | taking physical inventory of the merchandise |
| Perpetual inventory method | keeps track of inventory levels on a daily basis |
| Principle | amount of borrowed money in a loan |
| Rate of interest | percent that is basis for interest earned or paid |
| Reorder point | predetermined level of inventory when new stock needs to be purchased |
| Sales | dollar values of goods/services given to customers over a given time |
| Term | number of years a loan is extended |
| Variable costs | costs that go up and down depending on the quantity |
| Venture capitalists | investing in startup companies |
Created by:
dylandye
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