Department of Communication & Soft Skills

BUSINESS TERMS

1. Annual report: the yearly report made by a company at the close of the fiscal year, stating the
company's receipts and disbursements, assets and liabilities.
2. Appraisal: evaluation of a specific piece of personal or real property. The value placed on the
property evaluated.
3. Appreciation: the increase in the value of an asset in excess of its depreciable cost due to
economic and other conditions, as distinguished from increases in value due to improvements or
additions made to it.
4. Arrears: amounts past due and unpaid.

5. Articles of Incorporation: a legal document filed with the state that sets forth the purposes and
regulations for a corporation. Each state has different regulations.

6. Assets: anything of worth that is owned. Accounts receivable are an asset.

7. Audit: an examination of accounting documents and of supporting evidence for the purpose of
reaching an informed opinion concerning their propriety.
8. Bad debts: money owed to you that cannot be collected.

9. Balance sheet: an itemized statement that lists the total assets and total liabilities of a given
business to portray its net worth at a given moment in time.

10. Ballpark: an informal term for a rough, estimated figure. The term was derived from the
approximate assessment of the number of spectators that might be made on the basis of a
glance around at a sporting event.

11. Banker's draft: a bill of exchange payable on demand and drawn by one bank on another.
Regarded as being equivalent to cash, the draft cannot be returned unpaid.

12. Bankruptcy: the condition of being unable to pay debts, with liabilities greater than assets.
13. Barren money: money that is unproductive because it is not invested.
14. Benchmarking: rating your company's products, services and practices against those of the
front-runners in the industry.

15. Board of directors: those individuals selected to sit on an authoritative standing committee or
governing body, taking responsibility for the management of an organization. Members of the
board of directors are officially chosen by the shareholders, but in practice they are usually
selected on the basis of the current board's recommendations. The board usually includes major
shareholders as well as directors of the company.

16. Book Keeping: the process of recording business transactions into the accounting records. The
"books" are the documents in which the records of transactions are kept.

17. Bottom Line: the figure that reflects company profitability on the income statement. The bottom
line is the profit after all expenses and taxes have been paid.

18. Brand Name: a term, symbol, design or combination thereof that identifies and differentiates a
seller's products or service.

19. Break-even: the point of business activity when total revenue equals total expenses. Above the
break-even point, the business is making a profit. Below the break-even point, the business is
incurring a loss.

20. Budget: an estimate of the income and expenditures for a future period of time, usually one year.
21. Business Venture: taking financial risks in a commercial enterprise.
22. Capital: money available to invest or the total of accumulated assets available for production.
23. Collateral: property or goods used as security against a loan and forfeited to the lender if the
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borrower defaults.
Credit: another word for debt. Credit is given to customers when they are allowed to make a
purchase with the promise to pay later. A bank gives credit when it lends money.

25. Deflation: a reduction in the general level of prices sustained over several months, usually
accompanied by declining employment and output.

26. Depreciation: a decrease in value through age, wear or deterioration. Depreciation is a normal
expense of doing business that must be taken into account. There are laws and regulations
governing the manner and time periods that may be used for depreciation.
27. Downsize: term currently used to indicate employee reassignment, layoffs and restructuring in
order to make a business more competitive, efficient, and/or cost-effective.
28. E-commerce: the exchange of goods, information products, or services via an electronic medium
such as the internet.
29. Entrepreneur: an innovator of business enterprise who recognizes opportunities to introduce a
new product, a new process or an improved organization, and who raises the necessary money,
assembles the factors for production and organizes an operation to exploit the opportunity.
30. Equity Capital: money furnished by owners of the business.

31. Ergonomics: the study of workplace design and the physical and psychological impact it has on
workers. Ergonomics is about the fit between people, their work activities, equipment, work
systems, and environment to ensure that workplaces are safe, comfortable, efficient, and that
productivity is not compromised.

32. Exchange rate: the rate at which one country's currency can be exchanged for that of another.
33. Excise Duty: a tax on goods such as alcohol or tobacco produced and sold within a particular
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country.
Feasibility Study: an investigation into a proposed plan or project to determine whether and how
it can be successfully and profitably carried out.
Feedback: the communication of responses and reactions to proposals and changes or to the
findings of performance appraisals with the aim of enabling improvements to be made.
Financial Statements: documents that show your financial situation.

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37. Fiscal: relating to financial matters, especially in respect to government collection, use. And
regulation of money through taxation.

38. Fixed Asset: a long term asset of a business such as a machine or building that will not usually
be traded.

39. Franchise: an agreement enabling a third party to sell or provide products or services owned by
a manufacturer or supplier. The franchise is regulated by a franchise contract, or franchise
agreement, that specifies the terms and conditions of the franchise.

40. Fraud: the use of dishonesty, deception. Or false representation in order to gain a material
advantage or to injure the interest of others.

41. Freebie: a product or service that is given away, often as a business promotion.
42. Fundraising: events staged to raise revenue.
43. Gap Analysis: a marketing technique used to identify gaps in market or product coverage. In gap
analysis, consumer information or requirements are tabulated and matched to product categories
in order to identify product or service opportunities or gaps in product planning.

44. Gateway: e-commerce: a point where two or more computer networks meet and can exchange
data.

45. GDP: gross domestic product, the total flow of services and goods produced by an economy over
a quarter or a year, measured by the aggregate value of services and goods at market prices.

46. Globalization: the process of tailoring products or services to different local markets around the
world.

47. GNP: gross national product, gdp plus domestic resident's income from investment abroad less
income earned in the domestic market accruing to noncitizens abroad.

48. Guarantor: a person or organization that guarantees repayment of a loan if the borrower defaults
or is unable to pay.

49. Hard Sell: a heavily persuasive and highly pressured approach used to sell a product or service.

50. High End: relating to the most expensive, most advanced, or most powerful in a range of things,
for example, computers.

51. IMF: international monetary fund, the organization that industrialized nations have established to
reduce trade barriers and stabilize currencies, especially those of less industrialized nations.

52. Incentive Program: an award or reward scheme designed to improve sales force or retail
performance.

53. Inflation: a sustained increase in a country's general level of prices that devalues its currency,
often caused by excess demand in the economy.

54. Insolvency: the inability to pay debts when they become due. Insolvency will apply even if total
assets exceed total liabilities, if those assets cannot be readily converted into cash to meet debts
as they mature. Even then, insolvency may not necessarily mean business failure. Bankruptcy
may be avoided through debt rescheduling or turnaround management.

55. Intellectual Property: the ownership of rights to ideas, designs, and inventions, including
copyrights, patents, and trademarks. Intellectual property is protected by law in most countries,
and the world intellectual property organization is responsible for harmonizing the law across
different countries and promoting protection of intellectual property rights.
56. Inventory: a list of assets being held for sale, the stock of finished goods, raw materials, and
work in progress held by a company.
57. Invoice: a document that a supplier sends to a customer detailing the cost of products or
services supplied and requesting payment.
58. Law of Diminishing Returns: a rule stating that as one factor of production is increased while
others remain constant, the extra output generated by the additional input will eventually fall. The
law of diminishing returns therefore means that extra workers, extra capital, extra machinery, or
extra land may not necessarily raise output as much as expected.
59. Liquidity: the ability of a business to meet its financial responsibilities. The degree of readiness
with which assets can be converted into cash without loss.
60. Merchandise: goods bought and sold in a business. "merchandise" or stock is a part of inventory.
61. NASDAQ: national association of security dealers automated quotation system, a screen-based
quotation system supporting market making in registered equities.

62. Net worth: the total value of a business in financial terms. Net worth is calculated by subtracting
total liabilities from total assets.

63. Niche: a well-defined group of customers for which what you have to offer is particularly suitable.
64. Obsolescence: the decline of products in a market due to the introduction of better competitor
products or rapid technology developments.

65. Optimize: to allocate such things as resources or capital as efficiently as possible.

66. Outsourcing: term used in business to identify the process of sub-contracting work to outside
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vendors. The transfer of the provision of services previously carried out by in-house personnel to
an external organization, usually under a contract with agreed standards, costs, and conditions.
Overdraft: the amount by which the money withdrawn from a bank account exceeds the balance
of the account.
Overhead: a general term for costs of materials and services not directly adding to or readily
identifiable with the product or service being sold.
Patent: a type of copyright granted as a fixed-term monopoly to an inventor by the state to
prevent others copying an invention, or improvement of a product or process.
Performance Appraisal: a face-to-face discussion in which one employee's work is discussed,
reviewed, and appraised by another, using an agreed and understood framework.
Petty Cash: a small store of cash used for minor business expenses.

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72. Pink Slip: get your pink slip to be dismissed from employment
73. Poaching: the practice of recruiting people from other companies by offering inducements.

74. Postdate: to put a later date on a document or check than the date when it is signed, with the
effect that it is not valid until the later date.

75. Price Ceiling: the highest amount a customer will pay for a product or a service based upon
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perceived value.
Price War: a situation in which two or more companies each try to increase their own share of the
market by lowering prices.
Principal: the amount of money borrowed in a debt agreement and the amount upon which
interest is calculated.
Probability: the quantitative measure of the likelihood that a given event will occur.

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79. Probation: a trial period in the first months of employment when the employer checks the
suitability and capability of a person in a certain role, and takes any corrective action.

80. Profit Margin: the difference between your selling price and all of your costs.
81. Pro-forma Invoice: an invoice that does not include all the details of a transaction, often sent
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before goods are supplied and followed by a final detailed invoice.

Promotion: the communication of information by a seller to influence the attitudes and behavior
of potential buyers.
Promotional Pricing: temporarily pricing a product or service below list price or below cost in
order to attract customers.
Recession: a stage of the business cycle in which economic activity is in slow decline. Recession
usually follows a boom, and precedes a depression. It is characterized by rising unemployment
and falling levels of output and investment.
Redemption: the purchase by a company of its own shares from shareholders.
Redundancy: dismissal from work because a job ceases to exist. Redundancy occurs most
frequently when an employer goes out of business necessitating a cutback in the workforce, or
relocates part, or all, of the company.
Take-home pay: the amount of pay an employee receives after all the deductions, such as
income tax, social security, or pension, contributions.

88. Takeover: the acquisition of one company by another.

89. Think tank: an organization or group of experts researching and advising on issues of society,
science, technology, industry, or business.

90. Turnkey contract: immediately. An agreement in which a contractor designs, constructs, and
manages a project until it is ready to be handed over to the client and operation can begin he
conditions concerning payment for a purchase
Variable Cost: a cost of production that is directly proportional to the number of units produced

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92. Variable Interest Rate: an interest rate that changes, usually in relation to a standard index,
during the period of the loan

93. Verbal Contract: an agreement that is oral and not written down. It remains legally enforceable
by the parties who have agreed to it.

94. Vision Statement: a statement giving a broad, aspirational image of the future that an
organization is aiming to achieve.

95. walk: to resign from a job

96. Whistle Blowing: speaking out to the media or the public on malpractice, misconduct, corruption,
or mismanagement witnessed in an organization

97. Working Capital: the excess of current assets over current liabilities. The cash needed to keep
the business running from day to day.
98. Yield: a percentage of the amount invested that is the annual income from an investment
99. Zero-balance account: a bank account that does not hold funds continuously, but has money
automatically transferred into it from another account when claims arise against it
100. Zero-fund: to assign no money to a business project without actually canceling it
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