test 3 Flashcards
the right to take possession until a debt is repaid.
Lien
A special type of corporation where individual’s owners (or members) are taxed on the profit of the company, but the corporation (not the member) is liable for debts or judgement against the company.
Limited Liability Corporation (LLC)
- A loan provides the borrower a maximum amount of money he/she can borrow – the borrower can then access or use that line of credit for only as much as they need at any particular time.
Line of Credit
Cash or security that can be immediately turned into cash, which can be then repay any loan amount outstanding.
Liquid Assets
The state agency that collects state taxes
Louisiana Department of Revenue
How a business communicates a large numbers of customers, motivating them to learn more about the business and its offerings. EX: Advertising is marketing tool (TV, Radio, Flyers)
Marketing
The date a loan is repaid in full.
Maturity
A person who coaches and supports an entrepreneur or student studying to become an entrepreneur.
Mentor
The money a person borrows to buy real estate
Mortgage
An investment security that includes many different stocks purchases and held together. Investments purchases mutual funds because they are less risky than holding any individual stocks.
Mutual Fund
“net” means revenues after coats.
Net Income
A payment that is owned every month
Obligation
Debt obtained from a number of online companies. Borrowers need to disclose much less information about themselves to obtain online credit, and online credit companies make credit decisions much more quickly than banks. For these reasons, online credit is much more expensive for borrowers than bank loans.
Online Credit
When a company issues a check or makes a financial commitment for an amount greater than the amount the company has deposited in the bank. Also called a “bounced check”.
Overdraft
costs that a business insures that are not part of producing the goods or services its sells, but which are required to operate legally and efficiently. EX: the salary businesses pays its accountant is overhead these funds don’t help us sell more products, but you need your financial records and submit all required fillings.
Overhead
Owning an asset without any associated debt. EX: You paid off your car so you own it free and clear.
Own “Free and Clear”
When two or more individuals own a company. Partners are taxed on the profit of the company, and personally liable for any debts or judgement against the company
Partnership
the amount of money borrowed.
Principals – the amount of money borrowed.
a Latin phrase (for the snake of form) that is business mans a projection of future financial performance. A pro forma usually takes the form of a projection of future revenues and costs.
Pro Forma
the ability to find solutions to difficult or complex issues. The process of working through the detains of a challenge or crisis – often under pressure – to reach a solution.
Problem Solving
revenues minus costs.
Profit
Unit price minus cost of goods sold.
Profits per Unit
Most projections are for a year. A “quarter” means three months.
Quarter
Real estate is property and the buildings on it. Real estate can be of land, or can be a home on that piece of land, or it can be a building. Real estate is typically purchased using a mortgage. The down payment the buyer makes is called the buyer’s “equity”.
Real Estate
debt that includes a legal obligation by the borrower to repay the debt personally if the business is unable to make its scheduled debt payment. A secured debt can be guaranteed by the entrepreneur or by any credit-worthy guarantor.
Secured Debt
