| Term | Definition |
|---|
| entrepreneur | a person who is willing to take risks to be successful in creating new businesses and ventures |
| sole proprietor | a person who owns a business which is not incorporated and is the only owner, most very small businesses are this type |
| corporation | a legal from of business organization, treated as a separate entity, which protects the owners from personal liability |
| asset | any item of value owned by a company |
| balance sheet | a financial statement summarizing the assets, liabilities, and owner's equity of a business, a snapshot taken at a particular point in time |
| capital | money or property owned or used by a business |
| cost of goods sold | the direct costs attributable to the production of the goods sold by a company, such as materials and labor |
| current ratio | comparison of assets to liabilities a/l |
| debt ratio | comparison of debt (liabilities) to assets d/a |
| depreciation | amount of value of an asset subtracted each year until the asset is used up |
| equity | amount of ownership of a company, equal to assets minus liabilities |
| ethics | a system of morals or standards of conduct and judgement |
| income statement | a financial statement that summarizes income and expense activity over a period of time and show net profit or loss |
| gross profit | total sales revenue minus cost of goods sold |
| gross profit margin | total revenue minus cost of good sold divided by total revenue |
| Dow Industrial Average | DJIA. The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. |
| S&P 500 | Standard & Poor's 500. A basket of 500 stocks that are considered to be widely held. The S&P 500 index is weighted by market value, and its performance is thought to be representative of the stock market as a whole. |
| Nasdaq 100 Index | An index which tracks the performance of a select 100 stocks. Most of these 100 stocks were picked because they are the largest companies on the exchange, based on market capitalization. |
| NYSE | New York Stock Exchange |
| market indicator | any economic statistic that shows the current state and likely future trends of a financial market |
| blue chip stock | A "blue chip" is the nickname for a stock that is thought to be safe, in excellent financial shape and firmly entrenched as a leader in its field. Blue chips generally pay dividends and are favorably regarded by investors. A few examples of blue chips are Wal-Mart, Coca-Cola, Gillette, Berkshire Hathaway and Exxon-Mobile. |
| IPO | Initial Public Offering. Selling part of your company on the stock market in exchange for investment capital in your business |
| Venture Capital | investment money raised from firms that invest in high potential ventures in exchange for percentage ownership in a company |
| GAAP | Generally Accepted Accounting Principles |
| goodwill | A good relationship, as of a business with its customers or a nation with other nations. The positive reputation of a business viewed as an asset, equal to the excess cost required to acquire the business over the fair market value of all other assets |
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