DECA Entrepreneurship Vocabulary

What is an Acquisition?

The purchase of a company by another, larger firm, which absorbs the smaller company into its operations.

What is the role of the Board of Directors?

A group of individuals elected by a firm’s shareholders and charged with overseeing, and taking legal responsibility for the firms’ actions.

What is a Business Plan?

A document in which the entrepreneur summarizes her or his business strategy for the proposed new venture and how that strategy will be implemented.

Who is the Chief Executive Officer (CEO)?

The person responsible for the firm’s overall performance.

What is a Co-Operative?

An organization that is formed to benefit its owners in the form of reduced prices and/or the distribution of surpluses at year-end.

What is Common Stock?

Shares whose owners usually have the last claim on the corporation’s assets but who have voting rights in the firm.

What is a Conglomerate Merger?

A merger of two firms in completely unrelated businesses.

What is Corporate Governance?

The relationship between shareholders, the board of directors, and other top managers in the corporation.

What is Divestiture?

Occurs when a company sells part of its existing business operation to another company.

What is Employee Stock Ownership (ESOP)?

When a corporation buys its own stock with loaned funds and gives them to its employees, aligning employees’ interests with those of shareholders.

Who is considered an Entrepreneur?

A businessperson who accepts both the risks and the opportunities involved in creating and operating a new business venture.

What is a Franchise?

A form of business by which the owner of a product, service or method obtains distribution/marketing through affiliated dealers.

What does a Franchising Agreement specify?

The duties and responsibilities of the franchise and the franchiser.

What is a Friendly Takeover?

An acquisition in which the management of the acquired company welcomes the firm’s buyout by another company.

What is a General Partner?

A partner who is actively involved in managing the firm and has unlimited liability.

What is a Horizontal Merger?

A merger of two firms that have previously been direct competitors in the same industry.

What is a Hostile Takeover?

An acquisition in which the management of the acquired company fights the firm’s buyout by another company.

What is an Initial Public Offering (IPO)?

Selling shares of stock in a company for the first time to the general investing public.

Who are Inside Directors?

Members of a corporation’s board of directors who are also full-time employees of the corporation.

What is Limited Liability?

Investor liability is limited to their personal investments in the corporation.

Who is a Limited Partner?

A partner who generally does not participate actively in the business and whose liability is limited to the amount invested in the partnership.

What is a Merger?

The union of two companies to form a single new business.

What is a Microenterprise?

An enterprise that the owner operates part-time from home while continuing regular employment elsewhere.

Who are Outside Directors?

Members of a corporation’s board of directors who are not also employees of the corporation on a day-to-day basis.

What is a Parent Corporation?

A corporation that owns a subsidiary.

What is a Partnership?

A business with two or more owners who share in the operation of the firm and the financial responsibility for the firm’s debts.

What is Preferred Stock?

Shares whose owners have the first claim on the corporation’s assets and profits but usually have no voting rights.

What is a Private Corporation?

A business whose stock is held by a small group of individuals and is not usually available for sale to the general public.

What is a Public Corporation?

A business whose stock is widely held and available for sale to the general public.

What defines a Small Business?

An independently owned and managed business that does not dominate its market.

What is a Sole Proprietorship?

Business owned and usually operated by one person who is responsible for all of its debts.

What is a Spinoff?

Strategy of setting up one or more corporate units as new, independent corporations.

What is Stock?

A share of ownership in a corporation.

Who are Stockholders or Shareholders?

Those who own shares of a certain corporation.

What is a Strategic Alliance?

An enterprise in which two or more persons or companies temporarily join forces to undertake a particular project.

What is a Subsidiary Corporation?

One that is owned by another corporation.

What is a Tender Offer?

An offer to buy shares made by a prospective buyer directly to a corporation's shareholders.

What is Unlimited Liability?

A person who invests in a business is liable for all debts incurred by the business.

What is a Vertical Merger?

A merger of two firms that have previously had a buyer-seller relationship.

What is Managerial Accounting?

Capturing the business's day-to-day financial activities in pursuit of an organization's goals.

What does Debt Financing involve?

Borrowing money and not giving up ownership, which comes with interest and strict rules.

What is Liquid in business context?

A business’s current assets listed on financial statements.

What are Net Sales?

The base amount used for vertical analysis of items on the income statement.

What is a Cash Flow Statement?

A financial statement that shows the movement in the Cash account of a company.

What is an Investment?

The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.

What is Financing in business?

The act of providing funds/capital for business activities.

What is a Balance Sheet?

A financial statement summarizing a company's assets, liabilities, and shareholders' equity at a specific point in time.

What does Assets = Liabilities + Shareholders' Equity represent?

The fundamental accounting equation.

What is an Asset?

A piece of property or equipment purchased for business use.

What is a Liability?

A company’s financial debt or obligations that arise during the course of its business operations.

What is Shareholder’s Equity?

The net value of a company returned to shareholders if all assets were liquidated and all debts repaid.

What does Liquidate mean?

Converts assets into cash or cash equivalents by selling them.

Who is a Financier?

A person or organization that provides capital for a company.

What is Vertical Analysis?

A method of financial statement analysis representing each entry for the major account categories as a proportion of the total account.

What is an Economic Downturn?

A fall in economic growth just before a recession.

What are Secondary Needs?

Wants such as entertainment or leisure.

What are Primary Needs?

Basic needs such as food or shelter.

What is a Payroll Stub?

A notice that a direct deposit transaction has gone through.

What is a Corporate Chain?

Chain of businesses, for example, Starbucks.

What is an Economic System?

A system of production, resource allocation, and distribution of goods and services within a society.

What is a Performance Measure?

Regular measurement of outcomes and results that generates data on effectiveness and efficiency.