Test 3 Flashcards
(25 cards)
Lien
The right to take possession of collateral until a debt is repaid.
Limited Liability Corporation (LLC)
A special type of corporation where individual owners (or members) are taxed on the profits of the company, but the corporation (not the members) is liable for debts or judgement against the company.
Line of Credit
A loan that provides the borrower a maximum amount of money he/she can borrow – the borrower can then access or use the line of credit for only as much money as they need at any particular time.
Liquid Assets
Cash or securities that can be immediately turned into cash, which can then repay any loan amount outstanding
Louisiana Department of Revenue
The state agency that collects state taxes
Marketing
How a business communicates to large numbers of customers, motivating them to learn more about the business and its offering.
Maturity
The date is a loan is repaid in full
Mentor
A person who coaches and supports an entrepreneur or a student studying to become an entrepreneur.
Mortgage
money a person borrows to buy real estate
Mutual Fund
An investment security that includes many different stocks purchases and held together. Investors purchase mutual funds because they are less risky than holding any individual stock.
Net Income
“Net” means revenues after costs
Obligation
A payment that is owed every month
Online Credit
Debt obtained from a number of online companies. Borrowers need to disclose much less information about themselves to obtain online credit, and online credit companies make credit decisions much more quickly than banks. For these reasons, online credit is much more expensive for borrowers than bank loans
Overdraft
When a company issues a check or makes a financial commitment for an amount greater than the amount the company has deposited in the bank. Also called a “bounced check.”
Overhead
Cost that a business incurs that are not part or producing the goods or service it sells, but which are required to operate legally and efficiently. Ex. The salary the businesses pays its accountant is overhead – these funds don’t help us sell more products, but you need your accountant to keep your financial records and submit all required filings.
Own “Free and Clear”
Owning an asset without nay associated debt. Ex. You paid off your car so you own it free and clear.
Partnership
When two or more individuals own a company. Partners are taxed on the profits of the company, and are personally liable for any debts or judgement against the company.
Principle
Amount of money borrowed
Pro Forma
A Latin phrase (for the sake of form) that in business means a projection of future financial performance. A pro forma usually takes the form of a projection of future events and costs.
Problem Solving
The ability to fine solutions to difficult or complex issues. The process of working through the details of a challenge or crisis – often under pressure – to reach a solution.
Profit
Revenues minus cost
Profits per Unit
Unit price minus cost of goods sold.
Quarter
Most projections are for a year. A “quarter” means three months
Real Estate
Real estate is property and the building(s) on it. Real estate can be a piece of land, or can be a home on that piece of land, or it can be a building. Real estate is typically purchases using a mortgage. The down payment the buyer makes is called the buyer’s “equity.”
