IB Business HL 3.4 Vocab

Cost of sales

The direct costs attributable to the production of goods sold by a company, including materials, labor, and manufacturing overhead.

Gross profit

The difference between revenue and the cost of goods sold, representing the profit earned from a company's core business operations before deducting operating expenses.

Expenses

The costs incurred by a business in order to generate revenue, including overhead costs such as rent, utilities, salaries, and marketing expenses.

Retained profit

The portion of net income that a company retains after paying dividends to shareholders, which is often reinvested into the business for growth or used to pay off debt.

Dividends

Payments made by a company to its shareholders as a distribution of profits, usually on a regular basis, representing a return on their investment.

Non-current assets

Long-term assets held by a company for more than one accounting period, such as property, plant, equipment, and long-term investments.

Depreciation

The systematic allocation of the cost of tangible assets over their useful life, reflecting the decrease in value due to wear and tear, obsolescence, or other factors.

Current assets

resources a company can sell, use, or convert to cash within a year.

Current liabilities

Obligations that are due within one year, such as accounts payable, short

Non-current liabilities

Long-term obligations that are not due within one year, including long-term loans, bonds payable, and deferred tax liabilities

Net assets

The difference between a company's total assets and total liabilities, representing the company's equity or ownership interest.

Working capital

The difference between a company's current assets and current liabilities, representing its ability to meet short

Equity

The ownership interest in a company, representing shareholders' residual claim on its assets after deducting liabilities.

Intangible assets

Non-physical assets with value that is derived from rights and privileges, such as patents, trademarks, copyrights, and goodwill.

Goodwill

The premium paid for acquiring a company above its net tangible assets value, representing the value of its reputation, customer base, and other intangible factors.