Glossary for Business Owners

Adjusted Basis — Cost of asset for tax purposes after adjustments.
Adjusted Gross Income (AGI) — Income minus IRS allowed deductions.
Advisory Fee — Fee paid for investment or financial planning services.
Amortization — Scheduled repayment of debt over time.
Annual Percentage Rate (APR) — Yearly cost of borrowing.
Annuity — Product providing income for life or term.
Appraisal — Professional valuation of asset or business.
Arbitrage — Profit from simultaneous price differences.
Asset Allocation — Investment mix strategy.
Asset-Based Lending — Loan secured by company assets.
Asset Protection — Strategies to shield wealth from lawsuits/creditors.
Assets — Property or items of value owned.
Audit — Examination of financial records.
B2B (Business-to-Business) — Selling products/services to other companies.
B2C (Business-to-Consumer) — Selling directly to individuals.
Balance Sheet — Snapshot of financial position at point in time.
Balloon Payment — Large final loan payment.
Bankruptcy — Legal process resolving debts.
Basis Points — One one-hundredth of a percent.
Benchmarking — Comparing business performance to standards.
Beneficiary — Person/entity receiving assets or benefits.
Beta — Measures investment volatility vs market.
Blind Trust — Trust where beneficiary has no control.
Bond — Loan to government/corporation with interest repayment.
Book Value — Value of asset on balance sheet minus depreciation.
Bootstrapping — Self-financing business growth.
Brand Equity — Value premium from brand perception.
Break-Even Point — When revenue equals expenses.
Bridge Loan — Short-term loan until longer-term financing.
Broker — Person executing trades/transactions.
Burn Rate — Speed cash is spent by business.
Business Credit — Credit profile for the company.
Business Liability Insurance — Coverage for business legal risk.
Business Valuation — Process of determining value.
Buy-Sell Agreement — Contract governing ownership transfer.
Capital — Financial resources or assets.
Capital Expenditures (CapEx) — Money spent on fixed assets.
Capital Gains — Profit from asset sale.
Capitalization — How business funds operations (equity vs debt).
Cash Balance Plan — Hybrid pension plan for owners and employees.
Cash Flow — Money flowing in/out of business.
Cash Flow Statement — Report of cash operations and movement.
Charitable Remainder Trust (CRT) — Trust providing income with remainder to charity.
C Corporation — Business with separate tax entity.
Certificate of Deposit (CD) — Fixed interest savings contract.
Certified Public Accountant (CPA) — Licensed accounting professional.
COGS (Cost of Goods Sold) — Direct costs to make product.
Collateral — Asset pledged for a loan.
Commission — Fee based on sale or transaction.
Compound Interest — Interest on interest earned.
Contingent Liability — Potential future obligation.
Corporate Bond — Debt issued by corporation.
Corporate Resolution — Formal decision by corporate board.
Cost Basis — Original purchase price.
Cost Segregation — Tax strategy accelerating depreciation.
Covenant (Loan) — Conditions borrower must meet.
Credit Line — Borrowing limit accessible.
Crowdfunding — Raising funds online from multiple investors.
Current Assets — Assets convertible to cash within a year.
Current Liabilities — Debts due within one year.
Customer Concentration — Dependence on few customers for revenue.
Cyber Liability Insurance — Protects against digital breaches.
Deferred Compensation — Income paid future for tax/retention.
Defined Benefit Plan — Pension with guaranteed payout.
Defined Contribution Plan — Retirement plan with contributions only.
Depreciation — Reduction of asset value over time.
Diversification — Spreading investments to reduce risk.
Dividend — Payment from corporate profits to shareholders.
Double Taxation — Corporate profits taxed twice (C-corp).
Due Diligence — Formal investigation before purchase.
EBITDA — Earnings before interest, taxes, depreciation, amortization.
Economic Moat — Competitive advantage protecting profits.
Employee Stock Ownership Plan (ESOP) — Retirement plan holding company stock.
Employer Match — Contribution by employer to retirement plan.
Entity Structure — Legal formation type of business.
Equity — Ownership interest in business.
Estate Planning — Strategy to transfer wealth after death.
Exit Planning — Preparing to transition or sell business.
Fiduciary — Required by law to act in client’s best interest.
Financial Statements — Balance sheet, income statement, cash flow.
Fixed Costs — Expenses that don’t change with volume.
Fixed Income — Investments with predictable payments.
Forensic Accounting — Investigating financial discrepancies.
Franchise — Right to operate using larger brand’s system.
Freelancer — Self-employed contract worker.
GAAP — Standard accounting principles.
General Liability Insurance — Protects against basic business claims.
Goodwill — Intangible value like reputation/customers.
Grantor — Person establishing trust.
Gross Margin — Revenue minus COGS.
Gross Profit — Profit before operating expenses.
Growth Equity — Capital to scale business.
Guaranteed Income — Predictable lifetime payments.
Holding Company — Company owning other companies.
HSA (Health Savings Account) — Tax-advantaged medical savings.
Income Statement — Report of revenue and expenses.
Independent Contractor — Self-employed worker.
Index Fund — Investment matching market index.
Inflation — Increase in prices over time.
Inheritance — Transfer of wealth at death.
Installment Sale — Sale paid over time reducing taxes.
Insurance Rider — Additional policy feature.
Interest Rate — Cost of borrowing money.
Internal Rate of Return (IRR) — Investment performance metric.
Inventory — Goods ready for sale.
Investment Policy Statement — Written investment guidelines.
Joint Venture — Business partnership for project.
Key Person Insurance — Policy protecting against key employee loss.
KPI (Key Performance Indicator) — Measurable business metric.
Labor Burden — Total cost of employee beyond wages.
Leveraged Buyout (LBO) — Purchase using debt financing.
Liabilities — Debts and obligations owed.
Lien — Claim on property for unpaid debt.
Liquid Assets — Easily converted to cash.
Liquidity — Ability to access cash quickly.
Line of Credit — Revolving loan access.
Living Will — Medical directive document.
Marginal Tax Rate — Rate paid on last dollar of income.
Market Capitalization — Value of company shares.
Market Volatility — Frequency of price fluctuations.
Medicare Surtax — Tax applied to higher earners.
Merger — Combining two companies.
Net Income — Profit after all expenses.
Net Operating Income (NOI) — Operating revenue minus expenses.
Net Worth — Total assets minus total liabilities.
Operating Agreement — Rules governing LLC.
Operating Expenses — Regular business costs.
Operating Profit — Profit before interest and taxes.
Opportunity Zone — Tax benefit investing areas.
Owner’s Equity — Owner stake in business.
Pass-Through Entity — Income flows directly to owners’ taxes.
Patents — Legal rights protecting inventions.
Payroll Tax — Taxes withheld for employment.
Pension Plan — Employer funded retirement.
Pitch Deck — Presentation to attract investors.
Profit Margin — Percentage of profit from revenue.
Qualified Plan — IRS-approved retirement plan.
Retained Earnings — Profits kept in company.
Return on Investment (ROI) — Percentage gain from investment.
Revenue — Total money earned before expenses.
S Corporation — Pass-through corporation structure.
Self-Employment Tax — Tax to fund Social Security/Medicare.
Succession Planning — Preparing for leadership transfer.
Tax Deduction — Reduces taxable income.
Tax Liability — Total tax owed.
Trust — Legal structure holding assets for beneficiaries.