A ratio that measures the company’s performance by taking into account the sales and dividing it by the company’s total assets.
When a business loses all money and goes under debt, it is called business bankruptcy as opposed to individual bankruptcy. The owners are responsible for this type of bankruptcy.
A document that gives an insight on the long-term goals of a business. The plan is holistic in nature and covers all growth parameters such as finances, human resources, and spreading out.
When a business seeks a loan for development or financial support, it is called a commercial loan as opposed to a loan taken by an individual.
A mortgage for commercial property is termed as commercial mortgage.
An individual who sets up a new business involving financial risks, in order to build their own company and enjoy its outcomes themselves.
Equity is the ownership of assets in a company or a business, which gives you a direct ownership of the business in a certain percentage. Equity can have liabilities or debts tagging along.
Line of Credit
The amount committed by a financial institution, to be given as loan to a customer for a fixed time period.
A strategy that identifies and develops new markets for an existing product. With market development, a company can reach to a wider audience and gain better yield.
When a company takes a loan, they can mortgage any self-owned building or real-estate property as collateral for the loan. That way, if the company fails to pay the mortgage, the real estate property shall be foreclosed in exchange of the owed money. Mortgages come with a percentage of rate of interest, which increases periodically.
The process of hiring a vendor or an individual for a set of services, such that they do not have to invest in dedicated technology, gear, or manpower for that task or product. Small businesses outsource a lot of their work on contract basis.
A management line that is dedicated to designing and administering the procedures involved in production or functioning of a business. It includes redesigning operations to reduce resources or cut costs, perform audits on already established procedures, and so on.
An inventory of all individuals and companies that the business is associated with and needs to pay on a regular basis. It is also an exhaustive record of the salary, wages, and benefits of each employee.
The owner of any business or a company may also be known as the proprietor of the company.
Returns on Investments (ROI)
A profitability ratio that calculates the gains and losses of a business. It is usually a ratio of the company’s value with respect to the original cost of investment made.
A mindset or method that a company follows, wherein no department wishes to share their information, priorities, goals, or metrics with any other department, forcing each department to work individually without any collaborations.
Small Business or Startup
A young company founded by one or multiple entrepreneurs to bring a uniqueunqiue product or service into the market. Startups or small businesses usually have a smaller team of employees.
Taking out the estimated value of a property considering its assets, appraisal, and sales is called valuation.
When a new company with less experience or a brand new product/technology invests large amounts of money in the business, it is termed as a venture capital. It usually tags along with high risk.
The tactic of managing your assets in order to make sure that the value of your assets and hence your business does not decrease over time. It also includes ensuring that the money a company has currently is preserved.
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