| Accounts Payables |
tracks purchases and therefore money owed to suppliers |
| Accounts Receivables |
tracks sales and therefore money owed by clients to you/your business |
| Accruals |
income booked in advance of cash receipt for providing goods/services or expenditure noted in advance of actual payment for receiving goods/services |
| Adjusted book value |
in the case of a business, the book value of the assets and liabilities adjusted to eliminate goodwill and restated to their fair market value. |
| Arm's Length |
refers to a transaction between two or more unrelated companies or individuals |
| Assets |
fixed assets - which represents equipment, buildings, plant, machinery etc. used in the business; current assets - money in the bank, cash on hand and money owed to the business; non current assets - anything not in either of the 1st 2 categories (such as deferred expenditure) |
| Balance Sheet |
a summary of all the accounts of the business, so called because debit and credit accounts have to balance, shows the position of a business at the point in time when the accounts were prepared |
| Book value |
the difference between the total assets (net of depreciation and amortization) and total liabilities of the business (including shareholder's equity) as it appears on the balance sheet. |
| Break-even point |
represents the level (in units or dollars) of a business at which the revenue equals the expenses. |
| Business-to-business (B2B) |
business conducted between companies, rather than between a company and individual consumers. |
| Business-to-consumer (B2C) |
business conducted between companies and individual consumers, rather than between two companies. |
| Capital |
available funds to invest or the total of accumulated assets available for the ongoing business. |
| Depreciation |
a charge made against profits representing the part of an asset used in the year ie. the decrease in capital due to a year's wear and tear on the asset |
| Discount rate |
a rate of return used to determine the present value of the future earnings stream. |
| Due diligence |
the process of investigation and examination of the financial, management and business operations, conducted when a corporate transaction is being considered. |
| EBITDA |
earnings before interest expense, income taxes, depreciation, and amortization. |
| Equity |
common and preferred stocks, which represent a percentage share in the ownership of a company. |
| Fair market value |
highest price obtainable in an open and unrestricted market, between informed and prudent parties acting at arm's length and under no compulsion to act, expressed in terms of cash or cash equivalent. |
| Fair value |
term used in federal and provincial corporation and securities statutes for the purpose of dissenting shareholder rights; also, defined as fair market value without consideration of minority discount. |
| Initial public offering (IPO) |
a company's first issuance of shares to the general public. |
| Intangible asset |
something of value that you cannot feel, touch or see such as a brand, patent and human capital. |
| Internal rate of return (IRR) |
the rate of return that would make the sum of the present value of the future cash flows and final market value of the investment equal to the current market price of the investment. |
| Letter of intent (LOI) |
a letter (or document) from one company to the other, acknowledging a willingness or ability to do business. Letters of intent are typically non-binding. |
| Liability |
money owed by the business, includes loans, overdrafts, unpaid purchase invoices long term liabilities which are debts (usually loans) that are not due to be repaid for more than a year and current liabilities which are short-term debts due to be paid within a year |
| Liquidity |
the ability of an asset to be converted to cash quickly and without any price discount. |
| Market value |
the worth of an asset or group of assets if sold in the open market at arms' length. |
| Private company |
a business that is incorporated whose shares are not traded on the open market. |
| Public company |
a company which has issued securities through an offering, which are now traded on the open stock market. |
| Rate of return |
the amount of income realized or expected on an investment, expressed as a percentage of the total amount invested. |
| Retained Earnings |
profits after tax that are re-invested in the business instead of being paid as dividends to the shareholders/oweners of the business. |
| Return on equity (ROE) |
a measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after tax income (after preferred stock dividends) divided by book value. |
| Return on investment (ROI) |
a measure of a company's profitability equal to fiscal year's income divided by common stock and preferred stock equity plus long-term debt.Seed stage the initial money used to start and grow a new business. |
| Transaction |
an event that reflects an exchange of assets between two entities. Common examples include acquisition, divestiture, merger and joint venture. |
| Virtual Assistant |
Virtual Assistants are independent contractors who perform a wide range of administrative and business services. By utilizing today's technology they are able to provide administrative support to businesses all over the world. |
| Working Capital |
amount of capital available to be used in the business |
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