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- Accounts Receivable: Money that is owed by customers. Having receivables means that the company has made the sale but has yet to collect the money.
- Accounts Payable: Money that is owed to suppliers. Essentially, this is debt you'll have to settle. Accounts payable is used on a company's balance sheet.
- Cost of Good Sold (COGS) or Cost of Sale or Direct Cost: Opening inventory + material purchases + freight and duty – closing inventory + direct labor wages + repair & maintenance + utilities + realty taxes + depreciation.
- Current Assets: Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. Current assets are important because it is from current assets that a company funds its ongoing, day-to-day operations.
- Current Liabilities: Usually appearing on a company's balance sheet, it represents the amount owed for interest, account payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. Essentially these are the bills that are due very shortly, usually less than one year.
- Depreciation: An expense recorded to reduce the value of a long-term tangible asset. Since it is a non-cash expense, it increases free cash flow while decreasing the amount of a company's reported earnings.
- Liquidity: The capacity of a firm to pay its short-term debts from internal operations.
- Long Term Assets: Reported on the balance sheet, it is the value of a company's property, equipment, and other capital assets, less depreciation.
- Long Term Liabilities: Are accounted for by its debt obligations to other parties, which last longer than one year.
- Marketing Mix: Is the decision-making process for defining the actual tactics you will utilize to penetrate the market. It involves the product, the price, the promotion and the distribution model.
- Market Segmentation: A marketing term describing the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action.
- Market Share: is the percentage of sales of a specific product category that are accounted for by one brand. Brand shares can be expressed in terms of the sales value or the volume of units sold.
- Market Size: Is the market maximum potential. It could be defined:
- in geographic terms, ie. Alberta
- in product terms, i.e. 100,000 units
- in customer terms, i.e. 200,000 buyers.
- Solvency: The ability of an enterprise to meet both its long-term fixed expenses and to have adequate money for long-term expansion and growth.
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For more information about the content of this document, contact Jodi Stevenson.
This information published to the web on December 17, 2003.
Last Reviewed/Revised on December 22, 2005.
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