Accounts Payable
Any money a company owes (short term debts or liabilities) to a supplier for goods and services already received from the supplier, but not yet paid for
Accounts Receivable
Any money owed to a company by a customer for goods and services already delivered to a customer, but not yet paid for
Accrual Basis of Accounting
Revenue and expenses are recorded in the period in which they are earned or incurred regardless of whether cash is received or disbursed in that same period

This is the accounting basis that generally is required to be used in order to conform to generally accepted accounting principles (GAAP) in preparing financial statements for external users
Accrued Assets
Assets from revenues earned but not yet received
Accrued Expenses
Expenses incurred during an accounting period for which payment is postponed
Accrued Income
Income earned during a fiscal period but not paid by the end of the period
Accrued Interest
Interest earned but not paid since the last due date
Accrued Liability
Liabilities which are incurred, but for which payment is not yet made, during a given accounting period

Some examples in a manufacturing environment would be: wages, taxes, suppliers/vendors, etc
An agreement between two companies where one company is purchased or acquired by the other company and ceases to operate as an independent entity
Addressable Market
The size of that portion of the market that is likely to have an interest in what your business has to offer
Adjacent Market
A distinct market or set of customers that are similar to a business's core market that share similar needs or similar business processes, e.g. commercial real estate property management is an adjacent market to multi-family property management with similar requirements, but each market is seen as being a separate and distinct market
Adjacent Opportunities
The potential for adjacent market growth; the ability to enter new, adjacent markets where you can address similar needs with the existing product or process infrastructure
A person that has been given the authority, typically legally binding, to act on the behalf of the company or the company's principle owners
The process of paying down a debt in regular installments over time or deducting a capitalized expenditure over time
Angel Investor
A wealthy individual that makes independent investments in a company (typically an early-stage start-up company) in exchange for equity ownership and with the expectation of an eventual exit and financial return
The increase in value of an asset over time (as opposed to Depreciation)
Anything owned by an individual or a business, which has commercial or exchange value

Assets may consist of specific property or claims against others, in contrast to obligations due others
Asset Leverage
The ability to use assets to produce an income with less effort

A (continued)

To legally give someone the right or interest in an asset, such as when the "assignor" assigns the rights to a contract to an "assignee"
At Will Employment
The situation when a company can end an employment relationship with an employee at any time for any reason; employment laws vary from state to state and may affect the various aspects of at will employment
The verification of a company's financial performance and proper record keeping by an audit or accounting firm and typically performed by an auditor that is a Certified Public Accountant (CPA); the end product is a written, certified statement of the company's financial condition and compliance to standard accounting practices known as GAAP


Balance Sheet
A financial statement that lists the total assets, total liabilities and net worth of a business; the total assets equals or "balances" with the total liabilities and net worth
When a business cannot meet its legal obligations (liabilities) and petitions a federal district court for either reorganization of its obligations (known as a "Chapter 11" bankruptcy) or liquidates its assets (known as a "Chapter 7" bankruptcy); in a bankruptcy, the assets of a company are surrendered to a receiver or trustee that oversees the distribution of remaining assets to the creditors that are owed the outstanding obligations (this surrendering of assets may be voluntary or involuntary); the creditors typically end up with only a fraction of what was owed them
Bargaining Power of Buyers
The amount of influence the buyers have on a company
Bargaining Power of Suppliers
The amount of influence a supplier has on a company
Barriers to Entry
Market conditions that make it difficult for a new competitor to enter the market; typically would include the conditions of a high investment amount, protected intellectual property by existing market participants, long development cycles or locked up customer or distribution channels
A debt security issued by an issuer that receives cash from the holder and owes the holder an agreed upon principal and interest (coupon) at a later date (fixed maturity); typically issued by the U.S., state or local government or a corporation and typically backed by some sort of security interest (unlike a debenture that is typically not backed by any security interest)
Bottom Line
Net income after taxes. In general, it is an expression as to the end results of something, e.g. the net worth of a corporation on a balance sheet, sales generated from a marketing campaign, or final decision on most any subject
Any name, symbol or other identifier used individually or in combination to identify the goods and/or services of a seller and differentiate them, on any tangible or intangible basis, from similar goods and/or services of competitors.
The process of establishing the elements of a brand, including its name, identifying symbols and related marketing messages
Breach of Contract
The failure of a party to perform its obligations under the terms of the agreement
The number of units of sales required to cover your fixed and variable costs; the point at which revenues and costs are equal; a combination of sales and costs that will yield a no profit/no loss operation


Fixed costs = $5,000

Variable margin = $10 per unit

Breakeven = $5,000/$10 = 500 units
Breakeven Timing
The amount of time it takes for your opportunity to breakeven from the time you launch until your net income is zero or positive
A detailed financial plan - typically including an Income Statement, Balance Sheet and a Cash Flow Statement - during a given period of time; typically for one business cycle, such as a year, or for several cycles (such as a five year capital budget); also known as a Plan or a Pro forma
Burn Rate
The rate at which a new company uses up its venture capital to finance overhead before generating positive cash flow from operations; the rate of negative cash flow, usually quoted as a monthly rate
Business Plan
A detailed planning document that includes a description of the market, the competition, the company and its products or services, the management team, the financial plan (budget), the risks, the capitalization plan and the exit plan