FBM Terms

terms Gage Owen can up with

Cooperative

a type of business organization owned and operated by a group of individuals for their mutual benefit

Credit

the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future

Operation

a process or series of actions taken to achieve a specific result or goal

Producer

a person or entity that creates or manufactures a product or service

Farm Service Agency

a federal government agency that provides services and programs to farmers and ranchers, such as loans and disaster assistance

Borrow

to receive something, typically money, with the intention of returning it or paying it back at a later date

Profit

the difference between revenue and expenses for a business or other entity

Asset

something of value owned by a person or business, such as cash, property, or inventory

Liability

a financial obligation or debt that a person or business is responsible for paying

Accounting period

a specific length of time, such as a month or a year, for which financial transactions are recorded and reported

Balance sheet

a financial statement that shows a company's assets, liabilities, and equity at a specific point in time

Investor

a person or entity that puts money into a business or investment with the expectation of making a profit

General Partnership

a type of business organization in which two or more individuals share ownership and management responsibilities

Corporation

a type of business organization that is a separate legal entity from its owners, with the ability to issue stocks and make contracts

Sole Proprietorship

a type of business organization owned and operated by one individual

Depreciable Asset

an asset that loses value over time, such as a building or equipment, and is eligible for depreciation deductions on taxes

Depreciation

the process of allocating the cost of an asset over its useful life for tax and accounting purposes

Breeding Stock

livestock used for breeding and reproducing

Initial Cost

the original cost of an asset, such as the purchase price

Cash Flow

the amount of cash and cash equivalents coming in and going out of a business

Net Present Value

a method of evaluating an investment by calculating the present value of future cash flows

Bushel

a unit of measurement for agricultural products, such as grain, equal to about 35 liters

Patronage Dividends

dividends paid to members of a cooperative based on their level of business with the cooperative

Dividend

a distribution of a portion of a company's profits to its shareholders

Horizontal Integration

the merger or acquisition of companies at the same level of the supply chain in the same industry

Marketing Cooperative

a type of cooperative in which farmers or other producers band together to market and sell their products

Vertical Integration

the merger or acquisition of companies at different levels of the supply chain in the same industry

Supply cooperation

a business collaboration between companies to share resources, such as raw materials or production facilities, in order to increase efficiency and reduce costs

Annuity

a financial product that provides a steady stream of payments at regular intervals, often used for retirement income

Near-Term Asset

an asset that is expected to be converted to cash or used in the business within one year

Current Asset

an asset that is expected to be converted to cash or used in the business within one year

Market Asset

an asset that can be easily bought or sold on the open market

Quick Asset

an asset that can be quickly converted to cash, such as cash or marketable securities

Revolving Asset

an asset that is continuously used and replaced, such as inventory

Single Entry Accounting

a method of recording financial

Double Entry Accounting

a method of accounting where every financial transaction is recorded in at least two different accounts, such as a debit account and a credit account, to ensure accuracy and completeness of financial records.

Income Statement

a financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Cash Method

a method of accounting in which income is recorded when cash is received and expenses are recorded when cash is paid out.

Accrual Method

a method of accounting in which income is recorded when earned and expenses are recorded when incurred, regardless of when cash is received or paid out.

Book Value

the value of an asset as recorded on a company's balance sheet, calculated by subtracting accumulated depreciation from the original cost of the asset.

Accumulated Depreciation

the total amount of depreciation that has been recorded on an asset over its useful life.

Enterprise Budget

a budget that outlines the costs and revenues associated with a specific business or project.

Fixed Costs

costs that do not vary with the level of production or sales, such as rent or salaries.

Sunk Cost

a cost that has already been incurred and cannot be recovered, and should not be considered in decision making.

Capital

the money or other assets that a business uses to generate income.

Patron

a customer or supporter of a business or organization.

Trust

a legal arrangement in which a trustee holds assets for the benefit of one or more beneficiaries.

Estate Plan

a plan for managing and distributing a person's assets after their death.

Estate Taxes

taxes imposed on the assets of a deceased person.

Subsidize

to provide financial assistance to a business or organization.

Income Taxes

taxes imposed on a person's or business's income.

Financial Statement

a document that presents financial information about a business or individual, such as an income statement or balance sheet.

Partial

a part or portion of something.

Development

the process of improving or creating something, such as a new product or project.

Capital Gains

the profit made from the sale of an asset, such as a stock or real estate.

Estate Income

income generated from assets owned by a deceased person.

Operation Income

income generated by the ongoing operations of a business.

Put Option

a financial contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price within a certain period of time.

Call Option

a financial contract that gives the holder the right, but not the obligation, to buy an underlying asset at a specified price within a certain period of time.

Efficiency

the ability to use resources effectively to achieve a desired outcome.

Solvency

the ability of a company to meet its long-term financial obligations.

Profitability

the ability to generate a profit.

Title

legal ownership or claim to something, such as property or a business.

Contract

a legally binding agreement between two or more parties.

Front-Loaded Method

a method of depreciation in which a larger portion of the depreciation is recorded in the early years of an asset's useful life.

Accelerated Method

a method of depreciation in which a larger portion of the depreciation is recorded in the early years of an asset's useful life, resulting in higher depreciation expense in the early years and lower depreciation expense in later years.

Early Method

a method of depreciation in which a larger portion of the depreciation is recorded in the early years of an asset's useful life.

Margin

the difference between the cost of a product and the selling price. Often used to measure profitability.

Premium

an amount paid or charged in addition to the regular price or cost of something, typically as a condition of purchase or use.

Basis

the value or cost of an asset, used as a starting point for calculating capital gains or losses for tax purposes.

Commission

a fee paid to an agent or broker for services rendered in buying or selling goods or services, or for advice and assistance in such transactions.

Internal Rate

the discount rate that makes the net present value of all cash flows from a particular project or investment equal to zero.

Required Rate or Return

the minimum rate of return that an investor or project sponsor expects to earn on an investment or project.

Debt-to-equity ratio

a financial ratio that compares a company's total liabilities to its shareholder equity.

Non-current liability

a liability that is not due to be paid within the current accounting period.

Current liability

a liability that is due to be paid within the current accounting period.

Spent Expenses

money that has been spent and is no longer available.

Accrued Expenses

expenses that have been incurred but have not yet been paid for or recorded in the financial statements.

Recorded Expenses

expenses that have been recorded in the financial statements.

Cash Expenses

expenses that have been paid for in cash.

Average Tax Rate

the total amount of tax paid divided by the total income.

Marginal Tax Rate

the tax rate that would be paid on an additional dollar of income.

Maximum Allowable tax rate

the highest tax rate that can be legally imposed on an individual or business.

Share of Production

a portion of the total production of a product or service that is allocated to an individual or group.

Cash Result

the difference between cash inflows and outflows over a certain period of time.

Landlord

an owner of property who rents or leases it to another person or business.

Tenant

a person or business that rents or leases property from a landlord.

Inflow

cash or other assets that are flowing into a business or organization.

Outflow

cash or other assets that are flowing out of a business or organization.

Financial Condition

the financial health of a business or organization, often measured by its liquidity, solvency, and profitability.

Ratio

a mathematical expression that compares two or more related quantities.

Liquidity

the ability of a business or organization to meet its financial obligations as they come due.

Operating Ratio

a ratio that compares a company's operating expenses to its revenues.

Fixed Ratio

a ratio that compares a company's fixed expenses

Gross Ratio

A financial ratio that compares a company's total revenue to its total costs. It is used to measure a company's efficiency and profitability.

Current Ratio

A financial ratio that compares a company's current assets to its current liabilities. It is used to measure a company's liquidity and ability to meet short-term obligations.

Legal Act

An act or law passed by a government or legislative body.

Economic Act

An act or decision made with the goal of maximizing economic benefit or minimizing economic loss.

Social Act

An act or decision made with the goal of promoting social welfare or improving societal conditions.

Allocation

The process of distributing resources or assets among different individuals or groups.