Finances

Payroll

A list of a business’s employees and how they are compensated.

Payroll Register

Includes a description of employee earnings, tax deductions, benefits received, and payment type.

Balance Sheet

A financial statement that details assets, liabilities, and owner’s equity at a specific moment in time.

Assets = Liabilities + Owner’s Equity

The balance sheet equation used to assess financial stability.

Working Capital

The amount of money a business has for immediate use, calculated as current assets minus current liabilities.

Current Ratio

A financial ratio indicating the relationship between current assets and current liabilities.

Debt Ratio

Shows the relationship between a business’s total assets and total liabilities.

Income Statement

A financial tool that evaluates a business’s financial performance by detailing revenue and expenses.

Net Profit Ratio

Indicates how much a business earns in profit per dollar of sales.

Operating Ratio

Demonstrates the relationship of a company’s operating expenses to its net sales.

Start-Up Budget

A financial statement outlining all equipment, supplies, and marketing expenses required to start a business.

Profit

The financial gain calculated by the difference between the amount earned and the amount spent by a business.