| A | B |
|---|
| cost of equity | the required return of the owners in a company. |
| decentralized organization | organization in which business decisions are made at lower levels rather than at company headquarters. |
| diversification | the offering of a variety of products or service; also, investing in a variety of assets. |
| horizontal integration | a merger between two or more companies in the same type of business. |
| intellectual property | intangible assets used by companies. |
| creditor | an individual or an organization that provides funds to a business, with repayment of the funds & agreed-upon interest due at a future date; also, a business that extends credit to a customer. |
| depreciation | a decline in the value of an asset as it ages. |
| financial budget | a projected financial statement for specific future time period. |
| Financial Statements | specific reports prepared according to accepted accounting standards that provide financial information about an enterprise. |
| Income Statement | provides a view of the financial changes in a business that have occurred during a specific period of time. |
| Interest | the amount paid for the privilege of borrowing money. |
| Assets | All of the things a business owns and uses as a part of business operations. |
| Balance Sheet | identifies the assets, liabilities, and equity of a business as of a specific date. |
| Budget discrepancies | differences between budgeted amounts and actual financial performance |
| Business Financial Goals | goals that establish direction for financial plans of a business |
| Capital budget | a plan to acquire and finance long-term assets of a business |
| cash flow statement | shows how cash is used by a business during a specified time period. |
| collateral | an asset promised by a business to a creditor if repayment of a loan isn't completed. |
