Business & Finance Glossary: Key Terms & Definitions
Posted on May 3, 2024 in Economy
Business & Finance Glossary
Key Terms & Definitions
Accounting & Finance
1A S. ACCIOM OF ANONYMOUS:
Shares representing a portion of a corporation’s capital, where the sum of all share values equals the total capital.
ACT. PATRIM:
Business assets encompassing all property and rights owned by a company, forming its economic structure.
AUDIT:
Verification of a company’s financial records by an auditor to provide a professional opinion on the accuracy of its financial statements.
PERT CRITICAL PATH:
A graphical and mathematical system used to quantify the most important sequence of activities in a project, including those performed consecutively.
CAP.SOCIAL:
The total nominal value of all shares in a company at a given time, representing the initial capital plus any subsequent increases.
CONENTRACION HRIZONTL D COMPANIES:
Horizontal integration occurs when firms in the same industry and at the same stage of production merge or collaborate.
vertical mergers:
Vertical integration involves the merging or collaboration of businesses operating at different stages of the value chain.
DISRUPTION COSTS OF STOCK:
Costs incurred due to production or sales interruptions caused by insufficient inventory levels.
C DIRECT:
Costs directly attributable to the production of a specific product, such as raw materials and labor.
C FIXED:
Production costs that remain constant regardless of the volume of production.
C INDIRECT:
Costs that affect the entire company and are difficult to directly attribute to a specific product, requiring allocation methods.
C VARIABLES:
Production costs that vary with the volume of production.
Derex Q MAKES ACTION AT 1A Public:
Shareholder rights in a public limited company, including participation in profits, equity upon liquidation, acquisition of shares, voting rights, and access to information.
DIVIDEND:
A portion of a company’s profits distributed to shareholders for each share they own.
Borrowings:
Loans divided into multiple units called debentures, bonds, or notes, representing fractionalized credit distributed among numerous creditors.
STATES OF NATURE:
Uncontrollable situations that may arise, with varying degrees of probability, impacting business outcomes.
Management & Organization
ONLINE ORGANIZATIONAL STRUCTURE AND STAFF:
A structure adhering to the principle of unity of command, where each superior directs and controls subordinates, who receive orders from a single person. Staff personnel provide advice and support but do not directly manage line employees.
Linear organizational structure:
A vertical organizational design based on principles of authority and rank.
FACTORING:
A financing method where a company sells its accounts receivable to a third party at a discount to obtain immediate liquidity.
Working Capital:
The difference between current assets and current liabilities, representing the funds available for daily operations.
GLOBALIZATION:
The increasing interconnectedness of the world’s regions through economic, social, cultural, and political processes.
LEASSING:
A medium- to long-term financing option allowing companies to use assets without owning them, avoiding the need for upfront capital or loans.
Accounting Records
DAILY BOOK:
A chronological record of daily economic transactions within a company during each accounting period, using accounting entries to describe operations.
LEDGER:
A book containing accounts representing each element of a company’s assets, recording changes in their values.
Marketing & Strategy
MARKETING:
Activities undertaken to attract consumers to a company’s products, including product development, pricing, communication, and distribution strategies.
DECISION MATRIX. Member of the Natu:
A tool for comparing different strategies and potential outcomes based on various uncontrollable situations and their probabilities.
MATRIX TECHNOLOGY:
A strategic approach where companies analyze available technologies, their market share potential, and strategies to achieve timely adoption.
MODEL B2B network organization:
A network-based negotiation model where companies collaborate and share information to facilitate business transactions.
PERT MODEL:
A project management method based on the relationships between different activities within a production project.
MULTINATIONAL:
A company with subsidiaries operating in multiple countries, often controlled through a matrix structure.
OBLIGATIONS:
Fractional units of a loan, representing securities issued by companies to raise capital, with a commitment to repay within a specified period and at a fixed interest rate.
Organization:
A graphical representation of a company’s organizational structure, depicting relationships between its elements.
ORG FORMAL AND INFORMAL:
Formal organization refers to the defined structure with clear lines of authority, responsibility, and performance areas. Informal organization arises spontaneously based on common interests, group norms, and personal relationships.
Financial Resources
LIABILITIES:
Sources of financing or funds that enable a company to acquire resources for its economic activities.
HERITAGE:
The set of assets (goods and rights) owned by a company and its obligations (liabilities).
Investment Analysis
PER maturation medium:
The average time it takes to recover a monetary unit invested in an asset, representing the duration of the supply, manufacturing, sales, and collection cycle.
PAY BACK:
The time required to recover the initial investment capital from the project’s cash flows.
A FACTOR PROD:
The ratio of production output to the amount of resources consumed, measured in physical units.
PROD COMPANY GLOBAL:
The overall efficiency of a company’s production process, considering the combination of factors used and their performance.
breakeven or we rented THRESHOLD:
The sales volume at which total revenue equals total costs, marking the point where a company begins to generate profit.
Business Classifications
SMEs:
Small and medium-sized enterprises, typically defined by their number of employees (between 0 and 250).
BOOKINGS:
Undistributed corporate profits representing an increase in retained earnings.
Market Strategies
SEGMENTATION MARKETS:
Dividing a target market into groups with homogenous characteristics, such as age, income, or sex.
MINIMUM STOCK OR SECURITY:
The minimum level of inventory maintained to ensure continuity of production and sales, preventing stockouts.
Investment Valuation
IRR:
The discount rate at which the net present value of an investment’s cash flows equals zero, indicating the project’s profitability.
VAN:
The difference between the present value of an investment’s expected cash flows and its initial cost.
CASH VALUE OF AN ACTION:
The market price of a share, determined by supply and demand.
NOMINAL VALUE OF AN ACTION:
The initial value of a share at the time of issuance, calculated by dividing the company’s capital by the number of shares.
Net Asset Value or book value of an action is determined by the ratio of net assets to the number of outstanding shares, representing the portion of net assets attributable to each share.
