Businesses & Corporations

An ABA transit number is a unique identifier assigned to banking institutions by the American Bankers Association (ABA).
In the business world, abandonment refers to the purposeful surrender of ownership of an asset.
In the business world, abnormal spoilage refers to the unusual loss of goods or work in progress.
In the business world, absenteeism refers to the rate at which employees do not arrive for work as scheduled.
Absolute advantage exists when a business can produce a good or service more efficiently than any other business. Famed economist David Ricardo coined the term in the early 1800s.
An account executive is a person responsible for managing a relationship with a customer.
An account history is a statement of all the activity that has occurred in an account for a given period of time.
An accountant's letter, also called an auditor opinion, is a written statement describing an auditor’s independent, unbiased and qualified evaluation of the accuracy and completeness of a company’s
Accounting conservatism is one of the four accounting conventions, which are standards, customs or guidelines regarding the application of accounting rules.
An accretive acquisition is an acquisition that increases the acquirer's earnings per share.
Accrued liabilities are records of revenue and expenses in the periods in which they are incurred. They are a key component of the accrual method of accounting.
Accrued revenue is revenue recorded in the periods in which it is incurred.
An acquirer is a person or company that purchases all or a portion of an asset or company.
Additional paid-in capital (APIC), also called capital in excess of par value, is a measure of how much money investors have pumped into the company since inception in return for equity. The line item
Agency costs usually refers to the conflicts between shareholders and their company's managers. A shareholder wants the manager to make decisions which will increase the share value. Managers, instead,
The American National Standards Institute (ANSI) is a private, non-profit organization that oversees the development and enforcement of standards for products, services and personnel in both the United
An angel investor is a person who invests in highly risky companies, typically before those companies have any revenue or profits. Usually these companies are start-ups and/or small businesses that
An annual general meeting (AGM) is an SEC-mandated gathering of a public company's senior management and shareholders for the purpose of exchanging important information.
An anti-dilution provision is a clause in an option, security, or merger agreement that gives the investor the right to maintain his or her percentage ownership of a company by buying a proportionate
An anti-greenmail provision is a clause in a corporation's charter that deters the corporation's board from conducting a stock buyback.
An anti-takeover measure is a precautionary strategy used by companies to avoid being bought by another company.
An appraiser is a person capable of providing an appraisal.
Articles of incorporation are legal documents that set forth a corporation's basic information, such as its location, profit/nonprofit status, board composition, and ownership structure. Articles of
An asymmetric digital subscriber line (ADSL) is a modem technology that enables information and video to be transmitted over regular telephone lines.
In the accounting world, an auditor is a professional who examines and verifies a company's financial statements and records and in the United States examines a company's compliance with Generally
Average Revenue Per User (ARPU) is a measurement of profit in terms of customers.
Baby bells refer to the telephone companies that were created after the U.S. government required AT&T to divest assets in 1984 as part of a settlement for violating antitrust laws.
In the finance world, a back office processes the day-to-day paperwork and record-keeping associated with trades, confirmations, settlements and other financial transactions.
A back order is an order that cannot be filled in the usual time expected.  
A back stop is a person or entity that purchases leftover shares from the underwriter of an equity or rights offering.
A back up is an increase in a security’s price, yield, or spread before issuance. In other circles, back up means replacing a long-maturity security with a short-maturity security in order to capitalize
Slang for a draft business model.
In the merger world, a backflip takeover occurs when an acquirer becomes a subsidiary of its target.
Frequently used in manufacturing industries, backlog refers to unfinished work or to customer orders that have been received but are either incomplete or in the process of completion.
Backorder costs are associated with not being able to fill an order.  
Backward integration refers to a company buying or internally producing parts of its supply chain.
Bad debt recovery is when a company is able to collect a payment that was previously classified as a bad debt. 
A bag man is a person who solicits contributions to political parties or political causes on behalf of someone else.
Baidu is a large search engine in China. The word translates to "hundreds of times." Its ticker symbol is BIDU.
Balance sheet reserves, also known as "claims reserves", are accounting entries that reflect money a company sets aside to pay future obligations.
A balanced scorecard is a way to measure business performance.
A ballot reflects a shareholder's vote on a corporate decision.
A bank deposit is the placement of funds in an account with a bank.
A bank draft is a check that a bank guarantees.
A bank endorsement is an assurance that it will stand behind a check or other negotiable instrument that one of its customers creates.
A bank examination is a regular process of ensuring that a bank or lending institution is financially stable and obeying regulations while avoiding excessive risk. The CAMELS is a system used to rate
A bank run occurs when a flood of depositors withdraws funds from a bank within a short time frame.
Bankmail is a bank's promise that it will finance a company's takeover bid and not help the other bidders.
Bankruptcy is a legal process under which a borrower protects and/or liquidates assets in order to repay debts.
Also called negative goodwill, a bargain purchase occurs when a company buys an asset for less than its fair market value. Negative goodwill is the opposite of goodwill.
In the finance world, a company goes belly up when it declares bankruptcy or goes out of business.
The Better Business Bureau (BBB) was born out of so-called ‘vigilance committees’ which arose in the early 1900s to correct advertising abuses and help facilitate consumer trust in the marketplace. There
A bill of lading is like a receipt -- it is an acknowledgement of the receipt of goods. A carrier often gives a shipper a bill of lading and an invoice when it is moving goods for the shipper.
Black is slang for profit. Profit, also called net income, is the amount remaining after all costs, depreciation, interest, taxes, and other expenses have been deducted from total sales. Profit is also
A blue chip is a nationally recognized, well-established and financially sound company. The term comes from blue poker chips, which have the highest value in the game.
A board of directors is a team of people elected by a corporation's shareholders to represent the shareholders' interests and ensure that the company's management acts on their behalf. The head of the
A boardroom is a place in which a board of directors meets.
Bootstrapping refers to the efforts of an entrepreneur to start a business using his own assets as the source of capital. Bootstrapping can also refer to a highly-leveraged transaction when an investor
A break-even analysis is a calculation of the point at which revenues equal expenses. In securities trading, the break-even point is the point at which gains equal losses.
The break-even price is when the money received from the sale of a product covers the expenses associated with producing that product.
Brick and mortar is a term used to describe physical locations or outlets, typically in retail or other consumer facing businesses. The use of the term “brick and mortar” has evolved over the last two
Business development company (BDC) is a designation specific to public firms that invest in small, upcoming businesses. BDCs hope their stakes in the businesses will increase in value as the business
A business model helps shape a company's marketing and sales plans, its growth potential, and its ability to attract investors. Investors use business models to assess a company’s profit potential while
A buyout is the purchase of at least 51% of a company. Under a buyout, the previous ownership loses control over the company in exchange for compensation.
Camouflage compensation is compensation that is not fully disclosed or is hard to identify.
Capital accumulation occurs when a company acquires assets. Capital accumulation also occurs when an institutional investor or other financial institution acquires a large position in a company over time.
Capital budgeting is the process of figuring out which projects are financially worth an investment.
A capital dividend account is a special account that companies use to pay tax-free dividends to shareholders.
In general, a capital improvement is a one-time expenditure for physical assets such as buildings, land, construction, landscaping or major equipment.
A capital injection is an inflow of cash, stock or even debt into a company.
Capital IQ is a research division of Standard & Poor's.
Capital stock is the number of shares that a company's charter authorizes for issuance.
Capital structure refers to the blend of debt and equity a company uses to fund and finance its operations.
Cash is an asset that is in currency form.
Cash equivalents are company assets that are easily converted to cash.
Cash flow plans are strategic documents companies make in order to forecast their cash inflows and outflows over several periods. In the insurance world, cash flow plans refer to coordinating the payment
Also called the spot market or the physical market, a cash market is a market for securities or commodities in which the goods are sold for cash and for immediate delivery. In some cases, "immediate"
The chief executive officer (CEO) oversees the entire operation of a company or organization. A CEO is responsible for coordinating effective operating, marketing, financial, cultural and legal strategies
The chief financial officer (CFO) oversees the financial operation of a company or organization.
The chief operating officer (COO) is responsible for executing and implementing the operational directives set by the CEO and the board of directors. Whereas the CEO is responsible for the overall
Also called tag-along rights, co-sale rights allow minority shareholders to sell their stakes in a company if a majority shareholder wishes to sell its stake in a company.
A conglomerate is a corporation made up of several smaller, independently-run companies which may operate across several sectors and industries.
In business, consolidation refers to the merger of several companies in a specific industry, which typically concentrates market share in the hands of a few large companies.
Also called articles of incorporation or a certificate of incorporation, a corporate charter is a legal document that sets forth a corporation's basic information, such as its location, profit/nonprofit
Corporate governance is the process and rules under which a company is managed on the behalf of shareholders and stakeholders. The board of directors is primarily responsible for applying and maintaining
Corporate inversion is practice by U.S.-based companies of exchanging their registration with a subsidiary outside the U.S. in order to pay lower taxes.
Corporate profit, also called net income, is the amount remaining after all costs, depreciation, interest, taxes, and other expenses have been deducted from total sales. Profit is also referred to as the
A corporation is one of many ways to formally organize a business. Structuring a business as a corporation has a number of important legal requirements and consequences that impact investors.
Cost per thousand (CPM) is a marketing term referring to the cost of a media vehicle reaching 1,000 members of an audience. The M in CPM is the Roman numeral for 1,000.
Cottage industry is a production system that relies on producing goods, or parts of goods, by craftsmen at home, or small workshops, by individuals, small teams or family units instead of large factories
A current liability is a liability due in less than one year.
DAGMAR is a marketing term that stands for "define advertising goals, measure advertising results."
Data mining refers to the systematic software analysis of groups of data in order to uncover previously unknown patterns and relationships.
Data warehousing is an electronic method of organizing information.
A day rate is the daily cost of a good, service or operating a business.
Days payable outstanding (DPO) is the ratio of payables to the daily average of cost of sales. The formula for DPO is: Days Payables Outstanding = Accounts Payable/(Cost of Sales/360)
A de-merger is the partial or full sale of an asset or business segment.
A debit is an accounting record that represents either an increase in assets or a decrease in liabilities or net worth. A debit is the opposite of a credit.
Downsizing is a strategy used to reduce the size and scope of a business in order to improve its financial performance, usually by laying off employees or closing less-profitable divisions.
Downstream refers to the benefits (or costs) that will ultimately result from decisions made today.
Dual-class ownership is a type of stock structure in which a company issues different classes of stock, each with different privileges.
An e-meeting is simply an electronic meeting.
An early adopter is a person who purchases or tries new products -- typically technology -- before most other consumers.
The early majority is a group of people who purchase or try new products -- typically technology -- after a much smaller population of innovators and early adopters have done so.
Earmarking refers to the act of setting aside funds for special purposes or specific projects. Companies and governments earmark funds frequently. Note: Earmarking may also be referred to as pork barrel
The earnings allowance is the minimum amount a bank requires a customer to have available in a checking account in order to avoid monthly service charges.
An earnings credit rate (ECR) is a discount a bank gives a depositor on the depositor's bank fees.
Earnings momentum is a term to describe accelerating or slowing growth in earnings per share (EPS).  
Earnings power is the ability to generate profits.
An earnings recast, also called an earnings restatement, is the act of disclosing amended financial statements.
An earnings restatement, also called an earnings recast, is the act of disclosing amended financial statements.
An earnout is an agreement between the buyer and seller of a business whereby the buyer agrees to pay the seller additional money based on the performance of the business.
The term "eat your own dog food" means a company uses its own products and services.
Eating someone's lunch is a business strategy where a company gains market share by aggressively taking it away from a competing company.
An economic moat is a competitive advantage that is difficult to copy or emulate, thereby creating a barrier to competition from other firms. Common economic moats include patents, brand identity,
Electronic commerce is a way of doing business over large electronic networks such as the Internet. Also called e-commerce, electronic commerce greatly facilitates transactions between companies and
An elevator pitch is a quick explanation of a business idea or other proposal. The term reflects the idea that in the time it takes to ride an elevator, the speaker should be able to summarize the key
An employee contribution fund is a company-sponsored plan where employees deposit (contribute) their own money towards a charity.
Employee Share Ownership Trust (ESOT) refers to a plan that assists in acquiring and allocating a company's stock for employees.
Employee stock options (ESOs) are  call options on a company's common stock granted to a select group of its employees. Certain restrictions on the option provide a financial incentive for employees to
An employee stock ownership plan (ESOP), also known as a stock purchase plan, is a defined contribution plan whereby an employer invests the fund's assets in its own stock.
An endowment is any asset donated to and for the perpetual benefit of a non-profit institution. The donation is usually made with the requirement that the principal remain intact and money earned from
An enterprise zone is a geographical area (often a few blocks or miles in a town) with a 0% tax on gains from the sale of assets and property sold in an enterprise zone.
Equivalent annual cost (or EAC) is the cost per year of owning, operating, and maintaining an asset over its lifetime.
An evergreen option is an employee incentive offered by many companies as a way for the employee to accumulate company shares.
F. Duane Ackerman is the former CEO of BellSouth Corporation from 1997 to 2006. He was also chairman of BellSouth from 1998 to 2006.
A fabless company is a company that designs, develops and markets but does not manufacture silicon wafers. "Fab" is short for "fabrication." Fabless facilities do not have fabrication facilities.
A face-amount certificate company is a company that borrows from investors and offers its assets or other securities as collateral.
A factor is a financial institution that purchases receivables from a company.
Fair trade investing is an investment strategy whereby the investor only buys and sells companies that promote fair trade with suppliers in developing nations.
A fiduciary is a person or entity responsible for managing a qualified retirement plan in accordance with the Employee Retirement Income Security Act (ERISA). In a broader sense, a fiduciary is a person
In general, a financial guarantee is a promise to take responsibility for another company's financial obligation if that company cannot meet its obligation. The entity assuming this responsibility is
There are two parts to FP&A: financial planning and financial analysis. Financial planning is the process of creating a complete account of an individual’s or business’s plan for long-term security.
A fiscal year-end is the end of a 12-month, 365-day, or 13-period (or other measure) period of time.
A fleet card is a type of plastic payment card, either debit or credit, that is issued to employees to pay for expenses related to vehicle operations, notably fuel and maintenance. Payment of vehicle-
A follow-on offering, also called a secondary offering, is a sale of stock by a company or by an existing shareholder of a company that is already publicly held.
The Fortune 100 is an annual list of the 100 largest companies in the United States. Fortune magazine publishes the list.
The Fortune 1000 is an annual list of the 1,000 largest companies in the United States. Fortune magazine publishes the list.
The Fortune 500 is an annual list, published by Fortune magazine, of the 500 largest companies by revenue in the United States.
A gadfly is a shareholder who publicly criticizes a company's executives at the annual shareholders meeting.  
A game changer is a person or thing that radically changes an industry or a company.  
G&A expenses appear on the income statement. They are not part of the cost of goods sold but can constitute a significant portion of a company's expenses. Because this category often houses the
A general ledger (GL) is a consolidated record of a company's accounting entries.
A general partner is a member of a partnership that can incur debt or obligations on behalf of the partnership and is personally liable for those debts or obligations.
A generic brand is a nondescript brand of product that does not have a widely recognizable logo and is sometimes called the "house brand."
A go shop period is a window of time during which public companies can solicit competing purchase offers.
A godfather offer is a tender offer that is so generous that turning it down would be a breach of fiduciary duty.
The term going private refers to a company's departure from listing shares on any exchange. It is the opposite of going public.
Goldbricker refers to coating something with gold so as to pass it off for something valuable, though colloquially, the term refers to an unproductive person.
A golden boot is a financial package meant to encourage an employee to retire early.
A golden bungee is part of an executive's agreement that provides significant financial benefits to the executive upon termination as well as the opportunity to "spring back up" into a new position after
A golden hammer is a rule of thumb that people depend on too much.
Golden handcuffs are financial incentives designed to keep talented employees from leaving a company.
A golden handshake is essentially a severance agreement between an employee and employer.
A golden hello is slang for a signing bonus.
A golden life jacket is a compensation package offered by an acquirer to executives of the company it is acquiring. It is the same as a stay bonus.
A golden parachute is an agreement between a company and an employee (usually a high level executive) that provides significant financial benefits to the employee upon termination.
A golden share gives the holder the right to veto changes to a company's charter. Golden shares exist primarily in U.K.-based companies.
Goldman 360 is an online portal to Goldman Sachs's investment management system.
Gordon Gekko is a character from the 1987 Oliver Stone movie Wall Street and the 2010 sequel, Wall Street: Money Never Sleeps. Michael Douglas played Gordon Gekko in both movies.
A gorilla is a company that controls most of the market for a product or service.
Greenmail is an acquisition tactic whereby the acquirer attempts to obtain a controlling interest in a target by buying shares at a premium from the target's shareholders.
Greenwashing is the act of misleading customers and potential customers into believing that a product or service is environmentally friendly.
Gross sales, also called "gross receipts", refers to a company's revenue before subtracting discounts and returns.
Groupthink is a psychological phenomenon whereby pressure within a group to agree results in failures to think critically about an issue, situation or decision.
In the stock world, guidance refers to public communication from a company regarding earnings expectations.
A haircut is a reduction in an asset's value.
The halo effect is a phenomenon whereby consumers perceive the products or services from a certain company to be better than they really are.
A hard sell is an aggressive sales tactic used to persuade customers to make an immediate purchase. It is the opposite of a soft sell.
Harvesting, also known as an exit or liquidity event, is the act of cashing out of an ownership position in a company.
A headline effect is an adverse effect on a company's stock price brought on by media coverage.
Headline risk is the risk that media coverage of an event will have an adverse effect on a company's stock price.
Heavy industries often sell their products to other industries rather than to end users and consumers. In other words, they usually make products that are used to make other products. Accordingly, when a
A High Street Bank is a retail bank in the United Kingdom that has many locations.
A hiring freeze is a temporary cessation in hiring new employees.
A holding company owns controlling interest in another company or owns enough stock to control the company's management and operations. Different legal jurisdictions have different rules about what
The term home office has two definitions. First, a company's home office is its headquarters. Second, a home office is a place of business within a person's home.
Horizontal integration occurs when a company purchases a number of competitors. It is the opposite of vertical integration, whereby the parent purchases businesses in each stage of a product's life cycle
A hostile takeover is a type of corporate acquisition or merger which is carried out against the wishes of the board (and usually management) of the target company.
A hostile takeover bid is a type of acquisition or merger offer that is made against the wishes of the board (and usually management) of the target company.
Human capital is the skill, talent, and productivity that employees bring to a company. Coined by University of Chicago economist Theodore Schultz in 1964, the term refers to capital produced by investing
Human resources is an organizational function related to the procurement and retention of talented employees.
In business, the Icarus factor describes what happens when companies become overly dedicated or overly enthusiastic about a project or initiative, and that enthusiasm and dedication becomes a detriment to
Ideation is the act of forming ideas.
An identifiable asset is anything that has commercial or exchange value and can provide future economic benefits. Identifiable assets can be tangible or intangible.
Also called down time, idle time is when employees or machines are not working but are being paid.
Real estate developers pay an impact fee to cities or other municipalities to offset the town's cost of building the infrastructure to support a private real estate development.
Generally, an impaired asset is an asset whose market value is below book value.
A stock is in play when it is widely believed to be a takeover target.
Incorporation means to form a corporation. A corporation is a legal form of business organization. It is sometimes referred to as a "C Corp" in reference to a section of the IRS code governing corporate
An insider is an employee, director or any other person who is privy to confidential, nonpublic information about a company.
Without interchanges, there would be no electronic banking. The advent of the Internet has increased its use and prevalence, and card issuers get a considerable portion of their revenues from interchange
Interest expense is the cost of money. Interest expense is recorded on the income statement.
An interim CEO is a temporary chief executive officer.
Internal controls are the methods and processes through which a company ensures that the organization is adhering to important policies and obligations. A company's board of directors, management and
Investment banking is a category of financial services that specializes primarily in selling securities and underwriting the issuance of new equity shares to help companies raise capital. Investment
JAJO stands for January, April, July, and October -- the four months in which companies are likely to declare dividends. A dividend declaration is an announcement of an upcoming dividend payment,
A job footprint describes the variety and scope of functions for a given role in an organization.
A joint stock company is a company whose stockholders have the same privileges and responsibilities as an unlimited partnership. 
A joint venture (JV) is a project or enterprise in which multiple companies or individuals invest. Participants usually share equally in the project's direction and profits.
A Jonestown defense is a tactic to prevent hostile takeovers. It often results in the death of the target.
In the finance world, journal is short for journal entry. It is also short for The Wall Street Journal.
A junior accountant is an entry-level accountant. An accountant is a trained, knowledgeable person who performs functions necessary to compile, inspect, interpret, and/or report financial statements and
Junior equity is an issuance of stock that is subordinate to other stock issued by a company.
A junior security is subordinate to other securities issued by a company.
Just In Case (JIC) is an inventory-management method whereby materials, goods and even labor are on hand so they are there when needed in the production process. The method is generally the opposite of
Just in time (JIT) is an inventory management method whereby materials, goods, and labor are scheduled to arrive or be replenished exactly when needed in the production process.
Kaizen is a Japanese philosophy of continuous improvement.
Kanban is a Japanese term that refers to the  "just-in-time" inventory method's signal to a supplier to send more inventory. 
A keepwell agreement is a legal agreement between a parent company and a subsidiary to ensure solvency and financial stability for the duration of the agreement.
Keidanren is the abbreviation for Keizai Dantai Reng?kai or the Japanese Business Federation, which is a Japanese association of businesses.
Keiretsu is a Japanese term that refers to a small, integrated supplier group.
Losing key executives, particularly founders, can be very traumatic for companies. Their talent is usually hard to come by, and their roles are often more than just symbolic—in many cases these executives
Key performance indicators (KPIs) are written goals for companies, departments within companies and often individual employees.
A kickback is a method of bribery in which something of value is exchanged for a favorable decision.
Killer applications kill the competition and are so novel that they require an entirely new platform to work. They can be incredibly lucrative, especially if patented, though often they spawn knock-offs.
Killer bees can save the day for shareholders of targets. By devising ways to defend companies from takeovers, they can cost potential acquirers millions of dollars by implementing changes that force
Knowledge capital, also called intellectual capital, is the intangible asset that represents valuable ideas, methods, processes and other intuitive talents that belong to a company.
Because a KSOP is a combination plan, it has features of both ESOPs and 401(k)s. Companies can match contributions and reduce the expenses involved in running separate ESOPs and 401(k)s. KSOPs also
A Lady Macbeth strategy is a merger strategy in which a company betrays a target company by first appearing as a friendly alternative to an unfriendly acquirer and then later joining forces with the
The Lanchester strategy is a marketing strategy named after Frederick W. Lanchester, who wrote about World War II war strategies.
A lapping scheme is a fraudulent accounting practice that hides stolen cash by overlapping successive receivables.
In telecommunications, the last mile refers to the final step in the process that connects the end customer to a network. In the broader business world, last mile refers to the final, often expensive and
Late majority refers to the last large group of people to adopt a new product or technology.
Layaway is an arrangement in which a retailer agrees to reserve a piece of merchandise for a customer who cannot immediately pay for it in full.
A layoff is a temporary or permanent termination of employment by an employer.
Lead time is a crucial part of managing a manufacturing business or any business that involves waiting for supplies or products to arrive. Generally, the lower the lead time, the more flexible a company
A leadership grid, also known as a management grid, is a tool for determining leadership style. The idea dates to the 1960s and was developed by Robert Blake and Jane Mouton.
There are many kinds of leases. Some allow the lessee to buy the asset at the end of the lease term, some do not, for example. Regardless, a lease is a legal contract, and violating a lease can result in
There are many kinds of leases and thus many ways to calculate and record lease payments. Some allow the lessee to buy the asset at the end of the lease term, some do not, for example. For example, there
Lease-to-own contracts can be very helpful in the case of musical instruments and children, but they can also be very costly. Furniture, for example, is a popular thing to lease-to-own. Often, customers
Leaseholds designate which assets aren't really the lessee's property. Accordingly, these are assets that companies must account for them in particular ways.
Legacy assets became a hot topic during the financial downturn of 2008, because many struggling banks had them on their balance sheets and were having trouble attracting the capital they needed to stay in
In general, a letter of guarantee is a written promise to take responsibility for another company's financial obligation if that company cannot meet its obligation. The entity assuming this responsibility
A letter of intent is a non-binding document detailing a planned action on the part of an organization or individual.
A leveraged buyout (LBO) is a method of acquiring a company with money that is nearly all borrowed.
Limited liability is limited exposure to financial risk by investors of a company or a partnership. This exposure is usually limited to the individual's investment. 
A limited liability company (LLC) is a type of business entity formed that can be taxed like a partnership but protects its shareholders from liability beyond their investment.
A limited partner is a member of a partnership who cannot incur debt or obligations on behalf of the partnership and is not personally liable for those debts or obligations. Limited partners contrast with
A limited partnership is a business formation that limits the liability of certain owners.
A limited partnership unit is a piece of ownership in a limited partnership.
A liquid asset is cash or securities that can be converted to cash quickly.
Liquidity risk is the risk that a company or bank may be unable to meet short term financial demands. This usually occurs due to the inability to convert a security or hard asset to cash without a loss of
Logistics is the integration and management of the product value chain from suppliers to the customer.  It includes all aspects of the chain of production, including design, suppliers, financing,
Long-run average total cost (LRATC) represents the average cost per unit of production over the long run. In this calculation, all inputs are considered to be variable, because, over the long term, no
A long-term asset is an asset that a company expects to sell or otherwise recognize the economic value of after more than one year.
A long-term liability is a liability due in more than one year.
A ma and pa shop is a family-owned independent business.
Companies adopt a macaroni defense by issuing bonds that are redeemable at a high price in the event of a change in control.
Macromarketing describes how marketing affects an entire society's demand for goods and services.
In the business world, a mad hatter is a leader, usually a CEO, who makes unusual or impulsive decisions.
Made to Order (MTO) is a production and inventory strategy in which companies manufacture products or provide services according to each customer's specifications rather than according to a homogenous
Made to Stock (MTS) is a production and inventory strategy in which companies manufacture products or provide services according to their forecast of customer demand.
Maintenance expenses are the costs associated with keeping an asset in working order and good condition.
Make to Assemble (MTA) is a manufacturing strategy whereby the manufacturer creates or obtains all of the components of its products but does not assemble the product until a customer places an order.
A man-year is a measure of how much work one person does in a calendar year.
Management audits are not the same as individual performance reviews. Rather, the goal is to compare an organization's overall management quality to the rest of the industry and especially to competitors.
In the financial world, a management discussion and analysis (MD&A) is a written explanation of a public company's performance for the reporting period. The explanation appears in the company's
A manufacturer's suggested retail price (MSRP) is a price that a product manufacturer tells retailers to charge for their products.
Market cannibalization refers to a reduction in sales volume or market share of a product as a result of the introduction of a new product made by the same company. 
Market orientation focuses on providing products that respond to both the needs and wants of a target audience.
Market segmentation is a marketing strategy that separates individuals in a market into discrete groups based on certain criteria.
Market share refers to a company's portion of sales within the entire market in which it operates. This metric indicates a company's size within its market.
A merger is a corporate strategy of combining different companies into a single company in order to enhance the financial and operational strengths of both organizations.  
A "mom and pop" business is a colloquial reference to a small, independently owned and operated business with few employees and relatively low sales volume.   "Mom and pop" investors are typically
To "monetize" something is to convert non-revenue generating assets into sources of revenue. In economic terms, monetize means to convert any event, object or transaction into a form of currency or
Moore's law describes the computing hardware trend that transistors on an integrated circuit will double every two years.
The National Automated Clearinghouse Association (NACHA) operates the Automated Clearinghouse (ACH) network, which allows companies and consumers to send payments from one account to another.
Nationalization occurs when a country's government seizes the assets of corporations or resources without paying for those assets.
Natural capital is a term that describes an economy's natural resources such as water, timber or oil.
A negative confirmation occurs when entities that have a relationship with an auditor's client indicate they have financial discrepancies or disagreements regarding their accounts with the client.
A negative covenant is a promise a company makes to not exceed certain financial ratios or not conduct certain activities. Negative covenants are almost always found in loan or bond documents.
Negotiation is a process in which two or more parties resolve a dispute or come to a mutual agreement.
The net operating cycle, also called the cash conversion cycle, is the number of days it takes a company to generate revenues with assets.
Net revenue typically refers to a company's revenue net of discounts and returns. Sometimes, though, the user is referring to net profit, which is sales net of all expenses.
Net sales usually refers to a company's revenue net of discounts and returns. Sometimes, though, the user is referring to net profit, which is sales net of all expenses.
A non-cash charge is a write down or expense against earnings that does not involve cash.
Obsolescence risk is the risk that a company's product or service will become obsolete or out of date.
Off-premise banking refers to regular banking transactions that happen outside of a physical bank, typically at automated teller machines (ATMs).
Offensive competitive strategy therefore refers to those strategies that companies adopt to stay ahead of the competition rather than react to the competition.
An offering is the process of issuing new securities for sale to the public.
An offering price is the price at which a company lists its shares, bonds or other securities on an exchange.
Also called an official industrial action, an official strike is a work stoppage by a union.
An offtake agreement is an agreement between a buyer and seller of a resource to purchase or sell products that are yet to be produced.
Oil reserves are estimates of the amount of crude oil in a specific area.
Buying things on account is similar to saying, "put it on my tab." Eventually, however, you have to pay the tab. In our example, the transaction requires careful accounting. Once Company XYZ places its
An operating company/property company deal (opco propco) is a strategy in which a company is divided into at least two parts: a property company that owns all the real estate and assets associated with
Operating costs are key components of operating income calculation (and operating income is a crucial component of many financial measures). Thus, the lower a company's operating costs are, the more
An operating lease is simply a lease that does not give the lessee rights similar to those of an owner of the asset.
Outsourcing is the process of contracting a portion of a company's activities to third-party providers.
Overhead refers to the ongoing operating expenses necessary to running a business, but are not attributed to a specific business activity.  Also referred to as "indirect costs."
A Pac Man is a defense strategy for averting hostile takeovers.
A Pac-Man defense is a strategy for averting hostile takeovers.
Paid-up capital, also called paid-in capital, is a measure of how much money investors have pumped into the company since inception in return for equity. The line item appears on the balance sheet.
A parent company has control of the management and operations of a subsidiary company. It is also referred to as "holding company."
A partnership is a business structure in which the owners (partners) share with each other the profits and losses.
A pass-through entity is a special business structure that is used to reduce the effects of double taxation. Pass-through entities don't pay income taxes at the corporate level. Instead, corporate income
A patent is a grant of property rights to an invention. In the United States, this is done through the U.S. Patent and Trademark Office.
Payment in kind refers to the use of a good or service as payment instead of cash.
Payroll is the total of the compensation a company pays to its employees. In the accounting world, it is also a term used for calculating and processing paychecks (as in, "doing payroll").
Performance bonuses are intended to be motivational tools that encourage employees to keep goals in mind and take action in their everyday work to help the company achieve those goals. It is important to
Petty cash is money kept on-hand, generally, by businesses for making change for clients and to cover minor costs.
Although physical assets commonly come to mind when one thinks of assets, not all assets are tangible. Trademarks, patents, and goodwill are examples of intangible assets. Regardless of their physical
The opposite of the dividend payout ratio, a company's plowback ratio is calculated as follows: Plowback ratio = 1 – (Annual Dividend Per Share / Earnings Per Share)
A poison pill is a strategy that tries to create a shield against a takeover bid by another company by triggering a new, prohibitive cost that must be paid after the takeover.
Porter's 5 Forces is an analytical framework for assessing business competitiveness strategies in a particular market.
Price fixing is an agreement among businesses to sell the same product or service at the same price.
Price-takers, by definition, are not price makers. That is, they are not guaranteed profit makers, and they may even choose to make more product even if it’s not profitable to do so, just so they can
Out of 18 million businesses in the United States, fewer than 4,000 are publicly listed on a stock exchange. Private companies remain the default model of conducting business, so what are they and how do
A privately held company is different from a public company in that its stock is not traded on public exchanges like the New York Stock Exchange, Nasdaq, American Stock Exchange, etc. Instead, shares of
A privately owned company is different from a publicly traded company in that its stock is not traded on public exchanges like the New York Stock Exchange, Nasdaq, American Stock Exchange, etc. Instead,
Profit is the positive gain remaining for a business after all costs and expenses have been deducted from total sales. Profit is also referred to as the bottom line, net profit or net earnings. (See also
A profit center is a part of a company that directly adds to its profits.
Profit margin usually refers to the percentage of revenue remaining after all costs, depreciation, interest, taxes, and other expenses have been deducted. The formula is: (Total Sales - Total Expenses)/
A profit sharing plan gives employees a share in the company's profits. 
A public company is a company that is permitted to sell its registered securities to the general public. Also referred to as a "publicly-traded company."
A publicly traded partnership is a limited partnership that is traded in a capital market.
A qualified professional asset manager (QPAM) is a registered investment advisor (RIA) that helps pension plans and similar entities make investments.
Quality control is the act of ensuring that a company's goods and services are built and delivered to spec, on time and at the appropriate cost.
Quality management is the act of ensuring that a company's goods and services are built and delivered to spec, on time and at the appropriate cost.
Quality of earnings describes the amount of profit from core operations rather than accounting methods, extraordinary situations or earnings management.
Quarter over quarter refers to the mathematical process of comparing one quarter of data to the previous quarter. In business, note that the start and end dates of quarters can vary, though they are
Quarter to date refers to the three-month period extending from the beginning of the quarter to the end of the quarter. In the finance world, quarter 1 usually spans January 1-March 31; quarter 2 usually
A quorum is the minimum number of directors required to conduct a board meeting. Usually is a quorum is a majority.
A rabbi trust is a type of deferred compensation plan that lets employers transfer money into a trust for executives.
In the finance world, raider is short for corporate raider, which is a person or entity that purchases a company for the sole purpose of selling off its assets.
A raintaker is a successful salesperson or other individual who generates significant revenue for a company and then takes those clients with her to a new employer.
A ramp up is an increase in the amount of products or services a company sells, usually by expansion into new markets or geographic regions.
Raw materials are commodities, parts or substances that are assembled or processed to form a final product.  
A re-offer price is the price at which an underwriter offers a security to the general public.
The term receivables is short for accounts receivable (A/R), which are amounts bought by customers for a company's goods and services.
A registered principal is a person in a management position in the investment banking or securities business.
Reorganization may refer to the rehabilitation of a company's finances pursuant to a bankruptcy. It can also refer to any process that affects the tax structure of a corporation. In addition,
Research and development (R&D) aims to create new technology or information that can improve the effectiveness of products or make the production of products more efficient.
Restructure, or restructuring, refers to the management process of reorganizing a company to make it more profitable. 
Retail banking refers to the consumer-oriented services offered by commercial banks. These services include checking and savings accounts, mortgages and various types of loans and investment services
Retained earnings are the sum of a company's profits, after dividend payments, since the company's inception. They are also called earned surplus, retained capital, or accumulated earnings.
Return on assets (ROA) is a financial ratio that can help you analyze the profitability of a company. ROA measures the amount of profit a company generates as a percentage relative to its total assets. 
Also referred to as “return on net assets”, return on equity (ROE) is a measurement of how effectively a business uses equity – or the money contributed by its stockholders and cumulative retained profits
Revenue, also called sales (or turnover, in the UK), refers to the value of the products and services a company sells. Net revenue usually refers to a company's sales net of discounts and returns. Other
A reverse takeover is the purchase of a publicly-traded company by a smaller private company.
A reverse triangular merger is a merger in which the acquisition is carried out by a subsidiary of the acquiring company.
ROI (Return on Investment) measures the gain or loss generated on an investment relative to the amount of money invested. ROI is usually expressed as a percentage and is typically used for personal
Safekeeping is a term describing a financial institution's responsibility to keep clients' assets in a safe area.
The Salad Oil Scandal of 1963 was a case of corporate fraud perpetrated by the Allied Crude Vegetable Oil Company, which resulted in serious losses for major banks acting as its creditors.
A salary freeze is a temporary cessation of pay raises.
A sale is the transfer of title to a piece of property or performance of a service in return for compensation. In the retail world, a sale means a temporary price discount on certain items.  
In the business world, a sale of crown jewels occurs when a company is frantically attempting to fend off a takeover.
A sales lead is a prospective customer or information about a prospective customer.
Sales per square foot is an indicator of sales efficiency. The formula for it is: Sales Per Square Foot = Sales / Square Feet of Selling Space
Salvage value, also called scrap value, is the value of an asset after it has come to the end of its useful life.
Scalability refers to a company's ability to increase its production profitably.
A seasonal industry is an industry whose sales or profits fluctuate in repeatable patterns during the course of the year.
Seasonality is a fluctuation in sales or profits during the course of a fiscal year.
/*-->*/ The Securities Investor Protection Corporation (SIPC) is a nonprofit corporation created to insure the assets investors have deposited in brokerage firms. All registered brokers, dealers,
Seed capital is the earliest stage of capital investment for a start-up venture.
Sell side, sometimes called prime brokers, refers to investment firms which sell securities and assets to money management firms and corporate entities. They may be considered intermediaries which both
Settlement risk refers to the risk or probability that one party will not uphold their contractual obligation in a transaction or deal.
Severance pay refers to a payment from a company to an employee who is being discharged. 
The shadow banking system (or shadow financial system) is a network of financial institutions comprised of non-depository banks -- e.g., investment banks, structured investment vehicles (SIVs), conduits,
A sole proprietorship is a person who owns an unincorporated business by himself or herself. In a sole proprietorship, there is no legal distinction between the owner and the business entity. A sole
A squawk box is a speaker used at brokerage firms and investment banks to help brokers, analysts and traders communicate with each other. Squawk Box is also an early morning business program on CNBC.
Stock, also known as equity, represents ownership interests in corporations. Whether you own one, 100 or 100 million shares of stock in a company, you're an owner of the company.
A strategic buyout is a merger wherein one company acquires another based on the belief that the synergy of their combined operational capabilities will generate higher profits than if the two had
The suicide pill is a takeover defense mechanism whereby a target company takes self-destructive measures to thwart a hostile takeover.
Supply chain management (SCM) is the central organization of a company's production resources and materials intended to streamline the production process and reduce costs on a continuing basis.
The sustainable growth rate represents how quickly a company can expand using only its own sources of funding.
A swap is an agreement between two parties to exchange a series of future cash flows.
 Sweat equity is the time and effort that people contribute to a project.
SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis uses internal and external data to evaluate a company's competitive status and risk exposures in strategic planning. Like
A syndicate is a group of lenders or underwriters that come together to share or participate in a specific loan or investment.
T+1, T+2 and T+3, as well as other "T+" numbers, refers to the number of days it takes to settle a financial transaction.
Take or pay is a contract that obligates one party to either take possession of certain goods or pay a certain amount.
A takeover is the purchase of a company. A takeover is different from a merger, which occurs when the purchaser and the target both cease to exist and instead form a new, combined company.  
A takeover target is a company that is a good candidate for purchase by an acquirer.
A tangible asset is anything that has commercial or exchange value and has a physical form.
The formula for tangible common equity ratio is: Tangible Common Equity Ratio = (Common Equity - Intangible Assets)/Tangible Assets Some analysts also subtract preferred stock from common equity when
A target market is an intended audience for a marketing campaign, product or service.
A taxable spinoff occurs when a company divests a portion of its business in a manner that does not qualify as a tax-free transaction under Section 355 of the Internal Revenue Code.
A teaser is a document that advertises the potential future sale of a security.
The Tennessee Valley Authority (TVA) is the largest public power company in the United States. It supplies electricity, economic development assistance and natural resource management to millions of
The top line, also called gross sales, usually refers to a company's revenue before subtracting discounts and returns.
A transfer agent manages and maintains records of who owns a corporation's or mutual fund's stock or bonds. Most transfer agents are banks or trust companies, although some companies act as their own
Unappropriated retained earnings are profits that are not set aside for a specific purpose.
An unaudited opinion is a written statement describing an auditor’s expectations about the outcome of its audit before the audit occurs
Undercapitalization occurs when a company does not have enough cash to conduct its operations.
In the securities industry, underwriting fees are the fees earned by an investment bank to help bring a company public or to conduct some other offering. In the mortgage business, an underwriting fee is
Unit cost is a measure of a company's cost to build or create one unit of product.
An unqualified opinion is a written notice from an auditor stating that a company has complied with generally accepted accounting principles (GAAP).
Vagit Y. Alekperov is the founder of Russian oil giant Lukoil.
The value chain is the process through which a company turns raw materials and other inputs into a finished product.
A value network is a system that organizations, departments, operating units or people use to do work, buy or sell products, or create plans that benefit the entire organization.
A value-added reseller (VAR) is an entity that adds features or services to a product and resells the combination as a package.
A vendor is a company or person that sells goods or services.
Vendor financing is lending to a customer.
A vendor note is a short-term loan to a customer.
Venture capital is money for new, young, and/or small businesses that typically have little or no access to capital markets.
Venture capitalists provide funding (called venture capital) to start-up companies which they see as promising investments, but which otherwise are unable to obtain business loans. Venture capitalists are
Vertical integration describes a company's control over several or all of the production and/or distribution steps involved in the creation of its product or service.
A vertical market is a niche market in which a company supplies goods or services to a very specific type of customer. Its goods or services do not have broad appeal or application.
A vertical merger (also called vertical integration) is a merger between a manufacturer and a supplier. This is different from a horizontal merger between two companies that manufacture similar products.
Vittorio Mincato was the former CEO of Italian oil and gas company Eni.
Voting shares are shares of stock that allow the owner to vote on company matters.
A vulture fund is a pool of investor money that makes investments in securities from distressed issuers (usually bonds).
Under a waiver of demand, a payee assumes responsibility for a check or bank draft that he or she endorses.
The Walmart Effect is a book by Charles Fishman that examines how small businesses behave after a Walmart opens in their markets. It is also a phrase used to describe situations in which small businesses
War babies are securities issued by companies in the defense industry.
A war chest is the cash set aside to deal with unexpected changes in a business environment or to take advantage of a sudden opportunity.
Warehousing is the process of accumulating shares in a company for the purpose of eventually acquiring the firm.
A warm card is a bank card that allows the user to make one kind of transaction but not another.
A white knight is a company that acquires another company that is trying to avoid acquisition by a third party.
A wholly owned subsidiary is a subsidiary company whose parent company owns 100% of the company's outstanding common stock. 
Work in process (WIP) refers to a component of a company's inventory that is partially completed. The value of that partially completed inventory is sometimes also called goods in process on the balance
XBRL stands for Extensible Business Reporting Language.
In the business world, a year is a 12-month period, four-quarter period, or 13-period stretch of time. It is not always 365 days long, though it is usually very close to that. In business, note that a
Year over year, often referred to using the acronym "YoY," refers to the mathematical process of comparing one year of data to the previous year of data. In business, note that a fiscal year does not
YTD is short for year to date, which refers to the period extending from the beginning of the year to the present. In business, note that the beginning of the year is not always January 1; many companies
A zero-balance account (or ZBA) is a business-oriented bank account that usually has a balance of $0.
A zero-layoff policy is a company policy that prohibits laying off employees.
A zero-balance account (or "ZBA") is a business-oriented bank account that usually has a balance of $0.
Zero-based budgeting is a budgeting method that involves starting with $0 and adding only enough money in the budget to cover expected costs.
A zombie company is a firm that continues to operate even though its liabilities exceed its assets (in other words, it has a net worth of zero).