Domain 4 Vocab

• Desired Profit Margin- 


  The amount a business wants to EARN, usually expressed as a %
• Selling Price

  Total cost to produce a product or provide a service
• Assets


  Things owned (ex. cash, accounts receivable, inventory, & equipment)
• Liabilities


  Money Owed (ex. Credit card balance, long term debit/loans, unearned revenue)
• Equity


  Value of your company
• Income Statement


  Total revenues and expenses for a specific time period
• Cost of Goods 


  Direct cost of producing the product
• Net Income


  Income-(C.O.G + Expenses)
• Break-even Point


  Calculates how many products must be sold to break-even
• Fixed Cost


  Remains the same and no relation to products or services sold
• Variable Cost


  Fluctuates depending on production
• Ending Cash Balance 


  The amount of cash left at the end of the reporting period
• Burn Rate


  Identifies the amount of cash a company is spending every month and measures cash flow
• Run Rate


  Uses a company's current financials to predict their future performance
• ROI 


  Used by businesses to show how much their investment is earning. A way to calculate whether their products or service is cost effective or if it needs adjustment.
• Bootstrapping 


  Owner uses their own savings to fund the business
• Small Business Administration


  Reduces risk to lenders, community development organisations and other lending institutions
• Investments Groups or funds 


  Businesses that specialise in financing small businesses
• Angel investor


  Wealthy individuals willing to invest in a small business for an equity stake
• Crowdfunding


  Online platform where you pre-sell product for equity cash
• SBA Grants

  • Scientific research
  • Do not have to be paid back
  • Must have responsible owner equity