| A | B |
|---|
| return on investment (ROI) | calculates the business's return as a percentage of the money invested. |
| venture capital | Financing provided to start a company in return for owning part of a company. |
| forecast | A financial report that predicts the expenses to be incurred and the revenues to be earned. |
| budget | A detailed projection of financial performance for a specific time period (usually a year or less). It is a planning tool that helps a business stay on track toward profitability |
| income statement | A financial statement that shows all revenues received and all expenses incurred over a specific period of time. |
| balance sheet | A financial statement which shows the company's assets and its liabilities at a specific point in time. |
| Net Worth of a Company | The difference between the assets and liabilities of a business. |
| assets | Items of value that a business owns including cash, property, and equipment |
| liabilities | Amounts a business owes for purchases made on credit and loans. |
| bootstrapping | Building a company without outside assistance. |
| startup costs | Expenses that will occur only at the start of the business or infrequently such as office furniture, business operating licenses, or signage. |
| Ongoing monthly expenses | Expenses that will recur regularly such as salaries for the owner and employees, utilities, taxes, and health insurance. |
| capital | A company's wealth in the form of money or property. |
| 2 reasons that 50% of new small businesses fail | Poor accounting and insufficient capital |
