The amount printed on a security, such as the amount printed on paper currency, a stock certificate, bond or a mortgage. It is the nominal value. In some situations, face value is also called PAR VALUE.
See the abbreviated common usage term FAX.
A firm that purchases accounts receivable in exchange for cash in a factoring transaction. See FACTORING. In estimating, a standard or accepted common numerical value or relationship that is used to develop an ESTIMATE.
A method of obtaining cash through the sale of accounts receivable or transfer of title of accounts receivable. The amount of cash received is usually less than the value of the accounts receivable on the company books, allowing for payment to the FACTOR. In this method of financing, the purchaser, often a FACTORING COMPANY, becomes the principal (not an agent) for collection of the amounts due. The receivables are sold without recourse, meaning if the receivables are not collectible, the FACTOR cannot go back to the seller for reimbursement or file suit. In NOTIFICATION BASIS FACTORING, the seller’s customers remit directly to the factor. In NON-NOTIFICATION BASIS FACTORING, the seller handles the collections and remits the funds to the factor. See also DISCOUNT FACTORING; MATURITY FACTORING.
A firm that specializes in financing of accounts receivable for other companies for a fee. See FACTORING; ACCEPTANCE COMPANY.
See FACTORING COMPANY.
FACTORS OF PRODUCTION
An economist’s term for the key elements contributing to production; namely, land, labor, capital and management. Also called economic resources.
A manufacturing plant; a place where goods (products) are produced or manufactured. At a factory, raw materials or parts are purchased and converted into a new product (finished goods) through the application of labor (work).
The price charged for items on the first sale after producing them at the manufacturing plant.
For a business, failure is the same as BANKRUPTCY; a business that ceases to operate.
Of a given total of small businesses that begin operations, the percent that cannot survive; the percent that out of business because they could not make a profit. Opposite of SUCCESS RATIO.
FAIR MARKET VALUE
The most probable selling price of an item if offered for a reasonable period of time in a competitive market under average conditions.
In small business management or when investing in a small business, a RETURN ON INVESTMENT comparable and competitive with other investments. For instance, if more can be earned by depositing an investment into a savings account, a person shouldn’t waste his or her time struggling with the problems of owning a small business. In product pricing, the price of an article as determined by the intersection of the AVERAGE TOTAL COST CURVE with the DEMAND CURVE.
Advertising that contains blatantly false or misleading information.
A business owned and controlled by the members of a single family.
See FINANCIAL ACCOUNTING STANDARDS BOARD; a private organization that sets the public accounting rules and practices for American businesses.
A means of transmitting written information by telephone. At the origin (sender), the written paper is electronically copied, then transmitted by wire and decoded onto a piece of paper at the receiving end. Thus the received copy is an exact reproduction of the original. Short for FACSIMILE.
See FEDERAL DEPOSIT INSURANCE CORPORATION.
An analysis of a potential business opportunity with emphasis on attainable income, probable expenses and recommendations for the most advantageous marketing approach.
A practice of requiring an employer to hire more workers than are necessary for the work to be done; continuing to employ workers for jobs that are obsolete.
See FEDERAL RESERVE SYSTEM.
Relating to the government of the United States of America. As opposed to STATE, LOCAL or foreign government.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
A federal agency that guarantees (with limits) funds on deposit by member banks and the banks’ depositors and assists with banking regulation enforcement for monetary stability.
FEDERAL INSURANCE CONTRIBUTIONS ACT (FICA)
A federal government program (law) wherein mandatory contributions are made by employees for old age and survivor financial assistance. Also know as SOCIAL SECURITY.
FEDERAL RESERVE SYSTEM
An agency established in 1913 to regulate the monetary and banking system of the United States that regulates money supply, supervises the printing of money at the mint, acts as a clearing-house for transactions among banks, sets reserve requirements for member banks and examines member banks’ financial records to ensure they meet reserve requirements. Common nickname is “the Fed.”
FEDERAL SAVINGS AND LOAN ASSOCIATION
A federally chartered institution with a primary responsibility to accept people’s savings deposits and provide mortgage loans for residential housing.
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION (FSLIC)
A federal agency established in 1934 to insure deposits in member savings institutions.
Any of the many types of taxes paid to the U.S. government.
FEDERAL TAX IDENTIFICATION NUMBER
The number assigned by the Internal Revenue Service to a corporation or a partnership and used for recordkeeping purposes.
FEDERAL TAX I.D. NUMBER
The number assigned by the Internal Revenue Service to a corporation or a partnership and used for recordkeeping purposes.
FEDERAL TRADE COMMISSION (FTC)
A federal agency established in 1914 to foster free and fair business competition and prevent monopolies and activities in restraint of trade. The FTC administers both antitrust and consumer protection legislation.
Small industrial companies that provide parts or services to a major manufacturer.
See FEDERAL INSURANCE CONTRIBUTIONS ACT.
In business, a name other than the name of the person under which the business is registered. Most state laws require obtaining a fictitious name certificate or a trade name registration. Mandatory for a sole proprietorship if doing business in a name other than that of the owner. The certificate does not give exclusive use of the name to the certificate holder. A fictitious name is registered with the Secretary of State in the state in which business will be transacted and includes the address of the business as well as the names and addresses of the owners.
Insurance that covers employees who handle money, are entrusted with negotiable securities or are responsible for valuable assets. Such bonded persons are required by the bonding insurance company to carry out their duties and responsibilities effectively and honestly. Also called a SURETY BOND.
A relationship that implies a position of trust or confidence wherein one person is usually entrusted to hold or manage property or money for another.
See FIRST-IN, FIRST-OUT.
To store a document in an orderly manner to permit ease of retrieval at a future time; a cabinet for document storage. To place an original document on public record, such as a legal document. To submit a tax return for payment of taxes.
The waste basket; the trash can.
To obtain money, credit or capital for a business; also to supply money, credit or capital for a business; the money resources of a business; the managing of money. Also, a field of study at a University concerning the science of money management, credit, cash flow and similar subjects.
The total of all costs in making a loan as imposed by a creditor and payable by the borrower; the cost of credit.
A company engaged in making loans to individuals or businesses. Unlike a bank, a finance company does not receive deposits; it obtains financing from banks and other sources. Three general categories are: 1) CONSUMER FINANCE COMPANIES that make small loans directly to individuals; 2) sales finance companies (also an ACCEPTANCE COMPANY) that purchase consumer loans (PAPER) from others; 3) commercial finance companies (a COMMERCIAL CREDIT COMPANY) that make loans to other businesses. Businesses that do not qualify for bank credit often can obtain a loan from a COMMERCIAL FINANCE COMPANY. Businesses can make loans to customers and sell the loans to an ACCEPTANCE COMPANY.
When making a loan, the amount charged by the lender for costs incurred in making the loan; a loan origination fee; a mortgage service charge.
Those matters of a company that relate to money. Transactions of the business affecting the FINANCIAL CONDITION of the business.
The process of financial record-keeping, data collection, financial statement preparation and analysis for use by business owners, managers, creditors and the government.
FINANCIAL ACCOUNTING STANDARDS BOARD (FASB)
An independent self-regulatory organization responsible for establishing and interpreting GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
The evaluation of accounting (financial) data and interpretation of the results to determine the company’s financial condition and performance.
The stated financial solvency of a person or business; a personal NET WORTH statement; the value of money and property owed compared to the value of money and property owned.
Information relating to the financial affairs of a business.
Organizations that obtain money through deposits then lend the money to earn an income, such as a bank.
Being responsible for paying debts or obligations of a business, even under severe adverse financial circumstances. See also LIABILITY; FINANCIAL.
A document that describes a business owner’s expectations about money income and outgo for a period in the future and the expected future financial results.
Measures developed for planning and control that focus on key relationships between different classifications of accounting data such as liquidity, profitability and performance. Small businesses use these ratios to compare different time periods, projects or their business to similar businesses in the same industry.
A written document describing the NET WORTH, EARNINGS or other monetary relationship of a person, or business; a record of financial information and financial status. The most common of the many types of financial statements are the BALANCE SHEET, the INCOME STATEMENT and the CASH FLOW STATEMENT.
The composition of the right side of a BALANCE SHEET, including CURRENT LIABILITIES, LONG-TERM DEBT AND EQUITY. It is distinguished from CAPITAL STRUCTURE, which includes only long-term debt and equity.
The process of obtaining equity or borrowing money for a start-up business. Also refers to the money to be borrowed; a loan; a note.
A document filed to establish a creditor’s security interest in personal property (required by the Universal Commercial Code, form UCC-1); evidence of personal property as security for a debt.
In a manufacturing company, those products that have completed the production process and are available for delivery (sale).
FINISHED GOODS INVENTORY
An accounting of FINISHED GOODS.
The situation of an employee who is discharged for poor performance or an infraction of company rules. As compared with LAID OFF.
INSURANCE coverage for risk of loss due to a fire, usually for real property and personal property.
A general business noun describing a COMPANY and applies to all forms of business organization (corporation, partnership or proprietorship). See also COMPANY. Also means steady or unyielding; solidity with which an agreement is made or understanding has been achieved; assurance of completion of the agreement or understanding; not subject to negotiation, as in a FIRM AGREEMENT. Used as a verb in business means an agreement that is solid and not subject to negotiation; a legally binding commitment.
In lending, a written confirmation of a loan, whereby a lender will make a loan to a borrower with specific conditions such as loan amount, time period, interest rate and collateral. The firm commitment provides information to the borrower to allow processing of other activities while awaiting preparation and execution of the loan document.
A confirmed written or verbal ORDER not subject to cancellation.
An amount specified in an offer to sell that is not negotiable. As opposed to ASKING PRICE that is subject to negotiation before reaching final agreement on the price at which the transaction occurs.
An offer to sell products or services at a stated price. The seller will not negotiate a lower price; the seller will not sell for less than the quoted price or later ask a higher price. The final price of an offer that the seller is not willing to change.
FIRST-IN, FIRST-OUT (FIFO)
A method of accounting for inventory whereby the material is assumed to be sold in the chronological order in which it was received. Items purchased first are assumed to be sold before items purchased at a later date. See also LAST-IN, FIRST-OUT.
The senior loan on real estate; the mortgage recorded first. In case of default, the first mortgage holder would be paid before payment to any other creditor secured on the property, such as a SECOND MORTGAGE.
In VENTURE CAPITAL, the initial financing of a start-up business or a new venture. See SEED MONEY.
FIRST STOP SHOP
An office established by many state governments and other agencies that provide a complete package of information for the start-up business person, including counseling, handout literature and important contacts needed for establishing a business.
FISCAL YEAR (FY)
A 12-month accounting period of business operations beginning at any date, usually starting and ending on a different day from a calendar year (January 1st). Fiscal year is used for accounting, corporate management and taxing purposes. As an example, the fiscal year of the U.S. government begins October 1st. Sometimes a fiscal year contains 13 periods of four weeks’ duration or other subdivision of a year.
An accounting term that describes tangible property, used in the operation of a business such as buildings, machinery, fixtures, furniture and equipment. But fixed assets do not include items normally consumed in the course of business operation or production.
Any cost that occurs as time passes regardless of the volume of production or sales, such as rent, real estate taxes, insurance, office staff or interest. Such an expense does not vary with volume of sales or production. As opposed to VARIABLE COST.
See FIXED COST.
An income that is received on a regular periodic basis and is in a constant amount, such as a retainer which is paid on an open account. As opposed to VARIABLE INCOME, which depends on the amount of products or services sold during the period.
An article used in business to facilitate the buying or selling process, such as counters or racks.
Variable working hours that can be chosen by an employee to fit his or her personal preference.
In banking, the time between the issuing of a check and payment of the check by the bank. In general, the farther away the paying bank is from the deposit bank, the longer it will take for the check to clear. During this period the writer collects interest or has access to the funds. In lending, to make a loan; to extend credit to a borrower.
A loan using merchandise that is on display as collateral, such as automobiles on the display room floor.
FLOOR PLAN INSURANCE
Coverage by an insurance company for the merchandise that is on display (the display room floor). Usually, coverage is for the lender in the amount of the loan. Example, insurance coverage for automobiles in the dealer’s showroom.
Within a building, the area available to the business for operation of the business.
A quantity per unit of time, such as a production rate per day. Also, the general trend of cash movement.
A process planning tool used to symbolically represent the steps involved in a program, process or production.
An accounting term meaning to add a column of numbers downward on a page; thus the answer is at the foot of the page.
To estimate or calculate expected business results in advance. To plan the business course for the future. A document that sets down the plan. See BUSINESS PLAN; BUDGET.
The process of making (beforehand) a FORECAST, plan, estimate or prediction of future events.
FOREIGN TRADE ZONE (FTZ)
A location where imported goods may be kept for a limited period of time, free of duty, until shipped to an American destination.
The loss of a right to something as a result of nonperformance of an obligation or condition.
The illegal act of making a false signature or counterfeiting documents.
A printed document with blank spaces to be filled in.
FORM OF BUSINESS
See BUSINESS STRUCTURE.
The federal government document used to report manufacturer’s and retailer’s excise taxes.
The federal government document used to report income tax due for a person. See INDIVIDUAL INCOME TAX RETURN.
The federal government document used to report income paid (more than $600) to a person or an independent contractor for work done, as opposed to FORM W-2 for reporting wages of employees. See INFORMATIONAL RETURN.
The federal government document used to report income tax that must be paid by a corporation. Several variations of the form exist for the various corporate structures. See CORPORATE INCOME TAX RETURN.
The federal government document used to report earnings (INCOME) for a partnership. See INFORMATIONAL RETURN.
The federal government document used to report the proportionate share of partnership earnings to each person who participates in the partnership. See INFORMATIONAL RETURN.
The federal government document used to report earnings from a sole proprietorship (a self-employed person).
A FINANCING STATEMENT document required by the Uniform Commercial Code.
The federal government document used to report the amount of wages paid to an employee during a calendar year.
The American Association of Advertising Agencies; a trade association for advertisers that advises its members on topics such as ethics, fairness in advertising and other matters.
The right under which a person or company (FRANCHISEE) may market a product or provide a service, as granted by the proprietary owner (FRANCHISOR). The contract, defining the terms and conditions, between franchisor and franchisee is called a FRANCHISE AGREEMENT. Often a franchise is exclusive for a specified area.
Conducting business as a franchisee or the total overall sense of being identified with doing business as a franchisee, as opposed to independent. See FRANCHISE.
By state law, amounts paid to a state for operation of a business under a FRANCHISE AGREEMENT.
Any form of deceit, trickery, breach of condition or misrepresentation by which one party attempts to gain some unfair or dishonest advantage over another. Unlike negligence, fraud is a deceitful practice or a misstatement of a material fact.
Something given free of charge by a business to attract or retain customers, such as a trinket or knick-knack.
FREE ENTERPRISE SYSTEM
FREE ENTERPRISE ECONOMY
FREE ON BOARD (F.O.B.)
An agreement between two or more countries that promotes business by removing tax barriers; thus stimulating companies to conduct business in each other’s country.
FREE TRADE ZONE
A designated and secured area, legally outside of a country’s customs territory, where a trader may store, repack, manufacture or sell goods without paying customs duties or internal revenue taxes unless the product is moved to a customs territory.
See BILL OF LADING. Also, the document specifying the cost of transporting goods and requesting payment.
A service company that handles, for a manufacturer, all the transactions and documents needed for shipment of goods.
Shipping expenses for delivery of merchandise to the customer. Freight out is usually included in the price of the merchandise and is therefore passed on to the customer.
The average number of times an event occurs or an activity is repeated. In advertising, the average number of times an audience is exposed to an advertisement during a given period of time. FRINGE BENEFITS See EMPLOYEE BENEFITS.
See EMPLOYEE BENEFITS.
The beginning of an activity, such as marketing in a business, as opposed to product manufacture and delivery.
Better terms at the outset of a deal than in a later phase, used as an inducement to buy; an up-front charge.
The initial payment on a deal, usually a large purchase; in venture capitalism it is called SEED MONEY.
See FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION.
See FEDERAL TRADE COMMISSION.
See FOREIGN TRADE ZONE.
FULFILLMENT OF CONTRACT
See CONTRACT COMPLETION.
FULL POWER OF ATTORNEY
A POWER OF ATTORNEY that bestows total power of the signer to another person.
The worth, at some later date, of an investment made today, including the amount of interest that could be earned at an appropriate COMPOUND INTEREST RATE. That is, the future worth (FUTURE VALUE) is equal to the present worth (PRESENT VALUE) plus the amount of accumulated interest that would be earned. Also applies to a stream of future payments with the interest amount calculated for each payment. See also PRESENT VALUE; INTERNAL RATE OF RETURN; TIME VALUE OF MONEY; INWOOD TABLE.
See FUTURE VALUE.
See FISCAL YEAR.
All definitions were taken from www.small-business-dictionary.org.