Business Terminology

Occurs when a country uses the same level of resources to produce more goods than another country.

Absolute Advantage

The recording, analysis and reporting of financial transactions of a business.

Accounting

Money owed by a company for goods and services purchased on credit from vendors.

Accounts Payable

Money owed by customers for goods and services purchased on an open account.

Accounts Receivable

Interest that has accumulated and is added to a loan.

Accrued Interest

A mortgage in which the interest rate is adjusted periodically based on a preselected index.

Adjustable Rate Mortgage (ARM)

Placement of announcements and persuasive messages (in time or space) communicated through media or nonmedia forms; used to inform or persuade members of a target market or audience about a good, service, organization or idea.

Advertising

Series of coordinated advertising vehicles in various media, scheduled for a certain time period, and related by verbal an/or visual themes or common objectives.

Advertising Campaign

An overview of the competitive frame, target market and message to be used in an advertising campaign.

Advertising Strategy

An online marketing strategy that shares revenue between online advertisers/merchants and online publishers/sales-people; compensation is usually based on performance (sales, clicks, registrations).

Affiliate Marketing

Intermediaries who negotiate the purchase or sale of goods for their clients, but who do not take title to the goods.

Agents

Payment of a debt that allows the borrower to reduce debt through regular payments over a certain period of time.

Amortization

An interest rate that reflects the cost of a loan as a yearly rate.

Annual Percentage Rate (APR)

To increase in value or price

Appreciate

Everything owned that has value, including tangible items like cash, accounts receivable, inventory, land buildings, equipment.

Asset

An examination and verification of a business’s accounting records and procedures by a trained accountant or CPA (Certified Public Accountant).

Audit

First stage in the process of learning about a new good or service that the consumer has gotten information about but not yet formed an opinion on.

Awareness

An item not currently in stock but to be sold or delivered when it becomes available.

Back Order

The difference between a country’s total imports and exports.

Balance or Trade

A summary of a company’s financial conditions at a specific period of time ; indicates the company’s assets, liabilities, and net worth.

Balance Sheet

A legal process in which a company (or person) owes more than its asserts and is relieved from payment of debts by transferring those assets to a trustee.

Bankruptcy

A graphical internet adcertising tool; users click on the graphic to be directed to another Web site.

Banner ad

An evaluation and control method used to monitor sales force performance; involves evaluating the behavior of salespeople and sales performance.

Behavioral Analysis

Something that serves as the standard to which all other like items can be measured or compared.

Benchmark

A person who is designated to receive benefits, profits or advantages.

Beneficiary

A measure of an asset’s risk in relation to the market.

Beta

A contact between shipper and carrier, detailing what is being shipped, how it is being shipped, and terms of delivery.

Bill of lading

Document used by a company to authorize a set of purchases to be made or to be taken from inventory to fulfill an order.

Bill of Matertials

A loan payment, consisting of principal and interest, that is the same amount every month.

Blended Payment

An internet communication that combines a diary, column and directory; short articles on various subjects with links to other resources; updated often.

Blog

Common stock of well-known companies with a history of growth and dividend payments.

Blue-Chip Stocks

Individuals elected by shareholders; responsible for managing the president and high-level managers.

Board of Directors

The section of a print ad that contains test and more detailed information than the headlines and subheads.

Body Copy

A government or corporation-issued certificate of debt guaranteeing payment of the original investment plus interest by a certain future date.

Bond

Investment company that invests its shareholders’ moneys in bonds.

Bond Mutual Fund

Total assets minus intangible assets and liabilities; can be more or less than market value.

Book Value

An accounting term for the net profit or loss.

Bottom Line

A mark, symbol, word or combination that separates one company’s product from another’s.

Brand

Having knowledge that a brand exists; considered first step in the sale process.

Brand Awareness

Generic classification of goods or services; like goods or services are in the same brand category.

Brand Category

Addition of a new product to an already established line of products under the same brand name; new product benefits from the older products’ established reputation.

Brand Extension

Loyalty a consumer has to a specific brand over ta period of time.

Brand Loyalty

A method of identifying products and differentiating them from competing products.

Branding

The level of sales where revenue equals total costs; can also be expressed in terms of units of products.

Break-Even Point

Point at which spending exceeds revenues.

Budget Deficit

Period of time composed of a business upswing or expansion peak, downturn, trough and recovery.

Business Cycle

A document fully describing and analyzing a particular business; provides complete, detailed information about short - and long-term plans.

Business Plan

A set of regulations used by an organization to conduct its business.

Bylaws

A feature that gives the right to the issuer to repurchase a bond before maturity.

Call Feature

Statement normally found at the end of a commercial message that encourages the consumer to act.

Call to Action

Reduction in the sales volume, sales revenue or market share of one product as a result of the introduction of a new product by the same producer.

Cannibalization

Allocated amount of funds to be used on purchasing assets such as machinery, building, equipment, computers, etc., that are needed for longer than one year.

Capital Budget

Profit from the sale of an investment; the price received from the sale of an investment minus the price paid.

Capital Gain

Economic system based on private ownership of businesses.

Capitalism

Expense of keeping inventory on hand.

Carrying Cost

Good or service that generates a steady and predictable income.

Cash Cow

Financial statement that shows when cash flows are received and disbursed by a business.

Cash Flow Statement

A destination store, normally large, that concentrates on one category, enabling it to carry a broad assortment and deep selection at a low price.

Category Killer

A document written by a financial institution that shows a deposit with the issuer’s promise to return the deposit plus earnings at a certain interest rate within a period of time.

Certificate of Deposit

Route a product follows to link producer to end consumer

Channel of Distribution

Part of US Bankruptcy Code that deals with liquidations of a company’s assets.

Chapter 7

Part of US Bankruptcy Code that allows a business, an individual or a partnership to declare bankruptcy and postpone debt payments while the reorganization takes place.

Chapter 11

Document issued to incorporate a business; details important aspects of the corporation.

Charter

Number of copies distributed of a print advertisement.

Circulation

Number of clicks-through per ad impression (refers to online ads)

Clicks-Through Rate (CTR)

Pairing of two ore more brands on a single good or service.

co-branding

Unscheduled contact by phone or in person between seller and prospective customer.

Cold Call

Financial institution that raises funds by collecting deposits from businesses and consumers; makes loans to businesses and consumers; purchases corporate and government bonds.

Commercial Bank

Short-term unsecured note (2 to 270 days) issued by companies with good credit standings.

Commercial Paper

Compensation for meeting specific sales objectives.

Commissions

Bulk goods, such as wheat or metal, that investors buy or sell usually via futures contacts.

Commodity

Type of security that gives partial ownership in a company; has a vote in electing board of directors; entitles the holder to share in company’s success through dividends and/or capital appreciation.

Common Stock

Economic system in which government owns and operates all businesses.

Communism

Persuading an audience to purchase a specific product by showing a brand’s superiority in comparison with competing brands,

Comparative Advertising

Advantage gained that makes a product more desirable than the competition; persuading customers to buy instead; can include lower prices and superiority of goods or services

Competitive Advantage

A company engaged in two or more unrelated industries.

Conglomerate

When two companies in unrelated industries join together.

Conglomerate Merger

Person who uses a product but does not necessarily buy it

Consumer

Individuals or households that purchase goods or services for consumption or use.

Consumer Markets