| A | B |
|---|
| Profit | the amount of money earned over and above the amount spent |
| Financial Plan | A written outline of how the business will get money to start up and operate |
| Cash Flow | the amount of cash that is available at any given time |
| Start Up Capital | money needed to start a business |
| Start Up Cost | the cost or fees involved in establishing a business |
| Financial Forecasting | process of estimating a business's operating capital |
| Income | Revenue from the sales |
| Expenses | cost of operating a business |
| Fixed Expenses | An expense that remains the same regardless of business activity |
| Variable Expenses | expenses that may change |
| Reserved Capital | money that is set aside for unexpected cost or opportunities. |
| Commercial Debt Financing | borrowing money from a bank or other financial institution to fund a business. |
| Commercial Loan | a loan that finances a new or ongoing business |
| A Line of Credit | An arrangement in which bank customers can borrow a certain amount of money from the bank immediately. |
| Securred Loan | a loan that is backed by collateral |
| Unsecurred Loan | A loan that does not require collateral |
| Income Statement | a report of net income or net loss |
| Cost of merchandise sold | the amount of money the business paid for the goods that it sold to customers. |
| Balance Sheet | a report of the balances of all assets, liabilities, and owner's equity |
| Owner's Equity | the owner value in a business |
| Liabilities | what the business owes to creditors |
| Assets | the value of property |
| Payroll | the amount owed to employees for work |
| Salary | fixed amount of money paid to an employee |
| Hourly wage | paying an employee by a hourly rate |
| Deductions | amounts subtracted from an employees paycheck |
| Social Security Tax | a 6.2% payroll tax for funding the federal goverments retirement plan |
| Medicare | a required 1.45% payroll tax for the government medical program |
