Business Glossary

A glossary of business terms and definitions, served by


360-Degree Feedback A process where employees receive anonymous feedback from those they work with, including self-assessment.


Accounting Keeping track of all the money that comes in and goes out of a business. Accounts Payable Bills and debts a business needs to pay in the near future. Accounts Receivable Money that customers owe to a business for products or services. Acquisition When one company buys most or all of another company. Advertising Telling people about products or services to encourage them to buy. Agent Someone who acts on behalf of another person or business. Aggregate The total or combined amount of different items. Aggressive Pursuing one's aims with forceful or intensive effort. Alignment Arrangement in a straight line or correct relative positions. All-in Cost The total expenses associated with a transaction or operation. Allocation The action or process of distributing something. Alpha A measure of performance on a risk-adjusted basis. Alpha Testing A test of a new product by internal staff before public release. Amortization Spreading payments over multiple periods for debts or costs. Analysis Examining something in detail to understand it better. Angel Investor A wealthy individual who provides funding to startups for equity. Annual Report A yearly document summarizing a company's operations and finances. API (Application Programming Interface) A set of rules for software interaction. Appraisal Evaluation of something's value. Assets Valuable resources owned by a person or company. At the Money An option with a strike price equal to the market price of the asset. Audit A thorough review of a company's financial records.


Business Assets Things that a company owns that have value. B2B (Business-to-Business) Transactions conducted between companies. B2C (Business-to-Consumer) Sales and services from businesses to individual consumers. Back-end The server-side part of software, invisible to users. Bad Debt Money owed to a company that is unlikely to be repaid. Balance Sheet A financial statement of assets, liabilities, and equity at a certain time. Bankruptcy When a person or business can't pay their debts and seeks legal help. Bar Chart A graph with bars showing different quantities. Benchmark A standard for comparison. Benchmarking Comparing a business's practices with those of other companies. Beta Measure of a stock's market volatility. Black Swan An unexpected event with significant impact. Board of Directors A group governing and directing a company. Bond A loan to a company or government that pays interest. Bounce Rate The percentage of single-page visits on a website. Brand Equity The value of a brand to consumers and the market. Branding Creating a unique name and image for a product or company. Break-even Point The level of production or sales at which costs equal revenue. Broker An intermediary in transactions. Budget An estimation of revenue and expenses over a specified future period of time. Bull Market A market in which prices are rising. Business Model A company's plan for making a profit. Business Plan A document that outlines a company's goals and how it plans to achieve them. Buyout Purchase of company shares to control the company.


C Corporation A corporate structure where owners are taxed separately from the entity. Call Option A contract granting the right to buy an asset at a set price. Capital Money and other assets owned by a business used to start or maintain operations. Capital Gain Profit from selling an asset above its purchase price. Cash Flow The money that is moving (flowing) in and out of a business. CEO The highest-ranking person in a company who makes major decisions and oversees the business. CFO The executive who manages the company's finances. Chapter 11 Bankruptcy allowing business reorganization. Chartered Accountant Professional accountant with a recognized qualification. Client An entity using the services of a professional or company. Cloud Computing Utilizing internet-hosted servers for data storage and processing. Collateral Assets Assets that a borrower offers to a lender to secure a loan. Collateral Assets pledged to secure a loan or credit. Commodities Basic goods that are interchangeable with others of the same type in commerce. Competition Businesses that sell similar products or services and vie for the same customers. Competitor A business rival in the same market. Consumer A person who purchases goods or services for personal use. Consumer Goods Products sold for personal or household use. Consumer Surplus The difference between what consumers are willing to pay for a good or service and what they actually do pay. Contingent Liability A potential liability that may occur, depending on the outcome of a future event. Contract A legally binding agreement between two or more parties. Conversion Rate The percentage of users who take a desired action. COO The executive who oversees the day-to-day administrative and operational functions of a company. Core Competency A defining capability or advantage that distinguishes an enterprise from its competitors. Corporate Culture The beliefs and behaviors that define a company's employee and management interactions. Corporation A legal entity that is separate from its owners and can make a profit, pay taxes, and be held legally liable. Cost of Goods Sold (COGS) The direct costs attributable to production of goods sold by a company. Cost-Benefit Analysis A process by which business decisions are analyzed to understand their costs and benefits. Credit The ability of a customer to obtain goods or services before payment, based on trust that payment will be made in the future. Credit Rating An evaluation of the credit risk of a prospective debtor. Creditor An entity or person to whom money is owed by a debtor. Critical Path The sequence of stages determining the minimum time needed for an operation. Crowdfunding Raising small amounts of money from a large number of people, typically via the Internet. Crowdsourcing Obtaining input or information for a task by enlisting a large number of people. Cryptocurrency A digital currency using cryptography for security. Cryptocurrency Mining The process by which transactions are verified and added to the public ledger, known as the blockchain, and also the means through which new cryptocurrency coins are released. Customer An individual or organization that buys goods or services from a business. Customer Loyalty The likelihood of customers continuing to buy from a specific brand or retailer. Customer Relationship Management (CRM) A strategy for managing an organization’s relationships and interactions with current and potential customers.


Data Analytics The science of analyzing raw data to make conclusions about that information. Data Mining Examining large databases to generate new information. Debt Money that is owed or due to another individual or business. Debt Equity Ratio A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Debt Financing Raising funds through borrowing. Default Failure to fulfill a debt payment obligation. Default Risk The risk that a borrower fails to make the required payments on their debt obligation. Demand The desire and willingness to pay a price for a good or service. Demand Curve A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at that price. Depreciation The reduction in value of an asset over time. Depreciation Expense The allocation of the cost of a tangible asset over its useful life. Derivative A financial security with a value dependent on underlying assets. Digital Marketing Marketing products or services using digital technologies, mainly on the internet. Diversification A risk management strategy involving a variety of investments. Dividend A share of profits paid by a company to its shareholders. Dividend Payout Ratio A financial ratio that shows what percentage of a company's earnings are distributed to shareholders as dividends. Dividend Yield A ratio that shows dividend payments relative to stock price.


E-commerce Buying and selling goods and services on the internet. Earnings The amount of profit that a company produces during a specific period. Earnings Before Interest and Taxes (EBIT) A measure of a firm's profit that includes all incomes and expenses (operating and non-operating) except interest expenses and income tax expenses. Economic Downturn A general slowdown in economic activity over a sustained period of time. Economic Indicators Statistics that provide information about the economic performance of a country and its economic future. Economy The system of production, distribution, and consumption of goods and services in an area. Efficiency The ability to accomplish something with the least waste of time and effort. Efficient Market Hypothesis (EMH) A theory that suggests that all known information is already reflected in stock prices, implying that it is impossible to consistently achieve higher returns than the overall market. Emerging Economies Countries that are in the process of rapid growth and industrialization. Emerging Markets Nations with social or business activity in the process of rapid growth and industrialization. Employee A person who works for a business or organization for pay. Employee Benefits Non-wage compensation provided to employees in addition to their normal wages or salaries. Employee Engagement A measure of how passionate and committed employees are towards their work and company. Endorsement A public declaration of support for a product, service, or idea. Enterprise Value (EV) A measure of a company's total value, often used as a more comprehensive alternative to equity market capitalization. Entrepreneur A person who starts and runs their own business, taking on financial risks in the hope of profit. Entrepreneurship The activity of setting up a business or businesses, taking on financial risks in the hope of profit. Environmental Sustainability Practices and processes that reduce environmental impact for long-term ecological balance. Environmental, Social, and Governance (ESG) Criteria used to measure a company's ethical impact and sustainability practices. Equity The value of ownership interest in a company, such as stock. Equity Capital Funds raised by a company in exchange for a share of ownership in the company. Equity Financing Raising capital through the sale of shares in a business. Ethical Investing Investing in companies that align with certain moral or ethical principles. Ethics Moral principles that govern a person's behavior or how an activity is conducted. Exchange Rate The value of one currency for the purpose of conversion to another. Exit Strategy A planned approach to exiting a business or investment. Expenses The costs incurred by a business in the process of earning revenue. Export Sending goods or services to another country for sale.


Factoring A financial transaction where a business sells its accounts receivable to a third party at a discount. Fair Market Value The price that a property would sell for on the open market. Federal Reserve The central banking system of the United States. Fiduciary A person or organization that acts on behalf of another person or people to manage assets. Finance The management of large amounts of money, especially by governments or large companies. Financial Statement Reports that summarize a company's financial performance and position. Fixed Assets Long-term tangible property that a firm owns and uses in production of its income. Fixed Costs Business expenses that remain the same regardless of how much a company produces or sells. Foreign Exchange The exchange of one currency for another or the conversion of one currency into another currency. Franchise A license to operate a business using someone else's brand and business model. Franchisee An individual or company that holds the rights to operate a branch of a larger company (the franchisor) using its name and business model. Free Cash Flow The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Fund A pool of money set aside for a specific purpose or invested to generate returns. Financial Leverage The use of borrowed money to increase the potential return of an investment. Fixed Income Investments that pay regular interest or dividends and include instruments like government and corporate bonds. Foreign Direct Investment (FDI) Investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets. Franchise Agreement A legal contract in which a well-established business consents to provide its brand, operational model, and required support to another party to set up and run a similar business in exchange for a fee and some share of the income generated. Fundamental Analysis A method of evaluating a security to measure its intrinsic value by examining related economic, financial, and other qualitative and quantitative factors.


Globalization The process by which businesses or other organizations develop international influence or start operating on an international scale. Gross Margin The difference between revenue and cost of goods sold, which is expressed as a percentage of revenue. Gross Profit The difference between sales and the cost of goods sold. General Partner In a partnership, a general partner is someone who is responsible for the daily management of the partnership and is personally liable for its debts. Goodwill An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets. Gross Domestic Product (GDP) The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.


Hard Assets Physical or tangible assets that have intrinsic value. Hedge Fund An investment fund that pools capital from accredited individuals or institutional investors and invests in a variety of assets. HR (Human Resources) The department in a business that deals with hiring, training, and supporting employees. Hard Skills Specific, teachable abilities or skill sets that are easy to quantify, such as writing, reading, math, or the ability to use computer programs. Hedge Ratio A ratio that indicates the amount of exposure reduced by hedging and reflects the relationship between the position hedged and the hedging instrument used.


Incubator An organization designed to help new startups succeed by providing services like management training or office space. Inflation The rate at which the general level of prices for goods and services rises. Initial Public Offering (IPO) The first time a company sells shares to the public in order to raise capital. Innovation The introduction of something new, like a new idea, method, or device. Insolvency A financial state in which a person or business cannot pay their debts as they come due. Insurance A contract represented by a policy in which an individual or entity receives financial protection against losses. Intellectual Property Legal rights that come from intellectual activity in the industrial, scientific, literary, and artistic fields. Interest The cost of borrowing money, usually expressed as a percentage of the amount borrowed. Interim Temporary or for the meantime, often used to describe reports or executive positions. Inventory The goods and materials that a business holds for the purpose of sale or production. Inventory Turnover A measure of how many times inventory is sold or used over a period. Investment The action or process of investing money for profit or material result. IPO (Initial Public Offering) The process of offering shares of a private company to the public for the first time. Impression In marketing, an impression is the count of each time an advertisement or any other form of digital media appears on a user's screen. Incentive An incentive is something that motivates or encourages someone to do something or to work harder. Inflation Rate The inflation rate is the percentage increase in the price level of goods and services in an economy over a period of time. Initial Coin Offering (ICO) An ICO is a fundraising method that trades future crypto coins for cryptocurrencies which have an immediate, liquid value. Insolvent Insolvency refers to the situation where an individual or company cannot meet its financial obligations as they come due. Intellectual Property Rights (IPR) Intellectual property rights are legal rights that provide creators protection for original works, inventions, or the appearance of products, artistic works, scientific developments, and so on. International Trade International trade is the exchange of goods and services between countries. Inventory Control Inventory control is the process businesses use to manage their stock of goods.


Job Market The availability of employment and the demand for workers. Joint Venture A business arrangement where two or more parties agree to pool their resources for a specific task. Joint Product A joint product is a product that is created alongside another product in a process called joint production.


Labor Force All the members of a particular organization or country who are able to work, viewed collectively. LBO (Leveraged Buyout) Buying a company using borrowed money to meet the cost of acquisition. Lien A legal right or claim against a property by a creditor until a debt is paid off. LLC (Limited Liability Company) A flexible form of enterprise that blends elements of partnership and corporate structures.


Management The process of dealing with or controlling things or people. Market A place or platform where buyers and sellers meet to trade goods, services, or information. Marketing The action of promoting and selling products or services, including market research and advertising. Merger The combination of two companies into one larger company. Mission Statement A brief description of a company's fundamental purpose and focus. Monopoly A market structure characterized by a single seller, selling a unique product in the market. Mortgage A loan used to purchase a property, where the property itself serves as collateral.


Net Profit The actual profit after working expenses not included in the calculation of gross profit have been paid. Networking The action or process of interacting with others to exchange information and develop professional or social contacts. Nonprofit An organization that operates for purposes other than making a profit, such as for a charitable, educational, or social cause.


Outsourcing Hiring outside parties to perform services that were traditionally done by company employees. Overhead The ongoing business expenses not directly attributed to creating a product or service.


Profit & Loss Statement (P&L) A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time. Partnership A business organization in which two or more individuals manage and operate the business. Patent A government authority or license conferring a right or title for a set period, especially the sole right to exclude others from making, using, or selling an invention. Payroll The total amount of money paid by a company to its employees. Price Point The standard price set for a product by a company. Productivity The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input. Public Relations (PR) The practice of managing and disseminating information from an individual or an organization to the public to influence their perception.


Revenue The income generated from normal business operations. Risk Management The process of identifying, assessing, and controlling threats to an organization's capital and earnings. ROI (Return on Investment) A measure used to evaluate the efficiency or profitability of an investment.


Sales The exchange of a commodity for money; the action of selling something. Shareholder An individual or institution that legally owns a share of stock in a public or private corporation. Small Business A privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business. Sole Proprietorship The simplest business form under which one can operate a business. It is not a legal entity and simply refers to a person who owns the business and is personally responsible for its debts. Stakeholder A person, group, or organization that has an interest or concern in an organization. Start-up A young company founded to develop a unique product or service and bring it to market. Stock A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings. SWOT Analysis A strategic planning technique to identify Strengths, Weaknesses, Opportunities, and Threats.


Tax A compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions. Trade The action of buying and selling goods and services. Trademark A symbol, word, or words legally registered or established by use as representing a company or product. Turnover The amount of money taken by a business in a period; or the rate at which employees leave and are replaced.


Valuation An estimation of something's worth, carried out by a professional appraiser. Venture Capital Money invested in new or emerging companies with great profit potential. Vision Statement An aspirational description of what an organization aims to achieve in the mid-term or long-term future.


Wholesale The selling of goods in large quantities to be retailed by others. Working Capital The capital of a business used in day-to-day operations, current assets minus current liabilities.


Key Performance Indicator (KPI) A KPI is a measurable value that demonstrates how effectively a company is achieving key business objectives.