HomeMy WebLinkAboutBusiness Terms City of Palm DesertArticles of Incorporation: Official documentation submitted to governmental authorities
to establish a corporation's legal existence.
Balance Sheet: A financial report displaying a business's assets and liabilities.
Business License: Legal authorization permitting a business to operate within a specific
jurisdiction.
Business Plan: A comprehensive written document outlining a business's objectives,
strategies, resources, financial projections, and organizational structure.
Capital: Funds utilized for operating and managing a business.
Cash Flow: The movement of funds into and out of a business, which can either be positive
(income exceeds expenses) or negative (expenses surpass income).
Certificate of Insurance: Document confirming a business's insurance coverage.
Compounding: The process of reinvesting profits to generate growth in capital.
Demographic: A defined group sharing common characteristics, such as age, income,
gender, or location, often targeted by businesses for marketing purposes.
Depreciation: The reduction in value of an asset over time.
EIN: Employer Identification Number, serving as a unique identifier for a business entity,
akin to a Social Security number for individuals.
Equity: The total worth of a business if it were to be sold currently.
FICO: Company specializing in calculating credit scores for individuals and businesses.
HR: Human Resources department responsible for employment-related tasks within a
company.
Income Statement: Financial document summarizing a business's revenue and expenses
over a specific period.
Independent Contractor: A person providing services to a business without being
employed by it.
Liability Insurance: Coverage protecting a business from claims resulting from injuries or
damages to people or property.
Limited Liability Company (LLC): Business structure offering separation of owners'
finances and business liabilities.
Liquidity: The ease with which assets can be converted into cash.
Outsourcing: Procuring goods or services externally rather than producing them in -house.
Profit Center: A division or segment of a business responsible for generating revenue and
incurring expenses.
Registered Agent: Individual designated to receive legal documents on behalf of a
business entity.
Retained Earnings: Profits retained by a business after covering expenses.
S-Corporation: A corporation whose profits and losses are passed through to shareholders
for tax purposes.
SBA: Federal agency providing support and resources to small businesses.
Secured Loan: Loan backed by collateral that the lender can claim if the loan is not repaid.
Shrinkage: Loss of inventory due to theft, fraud, or administrative errors.
Sole Proprietorship: Business owned and operated by a single individual without separate
legal status.
Unsecured Loan: Loan not requiring collateral.
Venture Capitalist: Investor providing funding to promising businesses in exchange for
ownership stakes.
Virtual Office: Business address utilized for correspondence purposes without physical
presence.