Business Terms Glossary

What are Assets?

Property that a business owns, including cash and receivables, inventory, etc. Assets are any possessions that have value in an exchange. The more formal definition is the entire property of a person, association, corporation, or estate applicable or subject to the payment of debts. What most people understand as business assets are cash and investments,...

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What is an Asset Turnover?

Sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

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What is an Agent?

A business entity that negotiates, purchases, and/or sells, but does not take title to the goods.

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What is Adventure Capital?

Capital needed in the earliest stages of the venture’s creation before the product or service is available to be provided. (As mentioned in Entrepreneurship for the ’90′s by Baty.)

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What Is an Adaptive Firm?

An organization that is able to respond to and address changes in their market, their environment, and/or their industry to better position themselves for survival and profitability.

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What are Acquisition Costs?

The incremental costs involved in obtaining a new customer.

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What is an Acid Test?

Short-term assets minus accounts receivable and inventory, divided by short-term liabilities. This is a test of a company’s ability to meet its immediate cash requirements. It is one of the more common business ratios used by financial analysts.

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What is Accumulated Depreciation?

Total accumulated depreciation reduces the formal accounting value (called book value) of assets. Each month’s accumulated balance is the same as last month’s balance plus this month’s depreciation. Business Plan Pro shows accumulated depreciation in the Balance Sheet.

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