Glossary

A/P - Is the monies the company owes for goods or services received, but not yet paid for.
Also Known As: Accounts Payable
Examples: Our A/P includes an invoice from ABC company for that shipment of sprockets that arrived this morning from their New Haven plant.

A/R - Is the monies due to the company for goods sold or services rendered for which payment has not yet been received
Also Known As: Accounts Receivable
Examples: Our A/R includes an invoice we sent to ABC company for that shipment of sprockets we shipped to them last week.

ABC - (Activity-Based Costing) - a set of accounting methods used to identify and describe costs and required resources for activities within processes.

Accounts Payable - Is the monies the company owes for goods or services received, but not yet paid for.
Also Known As: A/P

Accounts Receivable - Is the monies due to the company for goods sold or services rendered for which payment has not yet been received.

Assets - are all of a company's physical or intellectual property that has financial value.
Examples: Now that we own our headquarters building, it is one of our assets.

B2B - Is the abbreviation for Business-to-Business e-commerce.

B2C - Is the abbreviation for Business-to-Consumer e-commerce.
Examples: Amazon.com does a lot of B2C business.

B2G - Is the abbreviation for business-to-government e-commerce..
Examples: Many companies are beginning to explore the potential of the B2G market.

Balance Scorecard - An integrated framework for describing strategy through the use of linked performance measures in four, balanced perspectives - Financial, Customer, Internal Process, and Employee Learning and Growth. The Balanced Scorecard acts as a measurement system, strategic management system, and communication tool.

Balance Sheet - A financial document showing the assets and liabilities of an organization.
Examples: A review of the corporation's balance sheet shows a solid net worth.

Barriers to entry - are those things that make it difficult for a new company to compete against companies already established in the field. Examples include such things as patents, trademarks, copyrighted technology, and a dominant brand.
Examples: Consulting is an industry with low barriers to entry. Manufacturing of silicon chips, however, has high barriers to entry.

Benchmarking - Is the process of gathering information about other companies in your industry to compare your performance against and to use to set goals.
Also Known As: bench-marking
Examples: We compare our turnover rate against the ten largest companies in our industry when we are benchmarking our HR organization.

Best Practices - He processes, practices, and systems identified in public and private organizations that performed exceptionally well and are widely recognized as improving an organization's performance and efficiency in specific areas. Successfully identifying and applying best practices can reduce business expenses and improve organizational efficiency. Also Known As: Good Practice

Black-Scholes Equation - Is used to determine the value or price of a stock option. It is a comparatively simple formula, with only a few common variables, developed by Fisher Black and Myron Scholes in 1973. It makes some simplifying assumptions about free-market economics, but it has become an industry standard.
Also Known As: black-shoals, black shoals
Examples: Using Black-Scholes lets us compare the value of the stock options issued to our initial VPs to what the new CTO candidate is asking for.

Bottom Line - Refers to the bottom line of an Income Statement. The bottom line shows the Net Income Available To Shareholders. When a company talks about increasing the bottom line, they mean doing things to either increase the revenue or decrease expenses so the company's income increases.

Break-even point - Is the point at which income matches expenditures. Typically, initial expenditures are high. It takes time for the income to reach the same level. The break-even point can apply to a product, an investment, or the entire company's operations.
Also Known As: Break Even Point
Examples: We expect the sales of our new widget to increase substantially in Q2 so that we reach the break-even point by late June.

Business Process Reengineering - Is a systematic, disciplined improvement approach that critically examines, rethinks, and redesigns mission-delivery processes in order to achieve dramatic improvements in performance in areas important to customers and stakeholders.