| A | B |
|---|
| income statement | a financial statement that shows how much a business has earned or lost during a year |
| balance sheet | financial statement that tells an entrepreneur what his or her business is worth at any given time |
| ratio analysis | ways of analyzing the financial condition of a business by comparing certain numbers from a balance sheet or income statement |
| current assets | cash (or things that can be converted to cash); also, items that are used up by a business within a year |
| current liabilities | debts due within a year |
| return on equity | the amount of money earned for each dollar invested by the owner of a business |
| variable costs | business expenses that change with each unit of product produced |
| fixed costs | expenses that don't change with number of units produced |
| pro forma income statement | financial statement which estimates the income of a business |
| cash budget | a financial report showing a business's projected and actual receipts/disbursements and the difference between the two |
| capital expenditures | long-term commitments of large sums of money to buy new equipment or replace old equipment |
| credit bureaus | collection agencies which provide a person's credit information to their member businesses |
| trade credit agencies | agencies that collect credit information on other businesses |
