Glossary of key business terms
This glossary is designed to be a quick reference guide, ideal for both seasoned professionals and those new to the business world.
Looking for a specific term? Press ‘ctrl’ or ‘cmd ⌘’ and ‘F’ on your keyboard to bring up the find bar on your browser – this will allow you to search for a specific word within the list by highlighting it on the page.
| Term | Defention |
| AER (Annual Equivalent Rate) | Interest earned on savings. |
| APR (Annual Percentage Rate) | Total cost of borrowing. |
| Arbitrage | Profit from price differences in markets. |
| Articles of Association | Rules governing a company’s operations. |
| Assets | Anything of value owned by a business. |
| Audit | An official inspection of financial records. |
| Balance Sheet | A snapshot of a company’s financial position. |
| Benchmarking | Comparing business performance against industry standards. |
| Business Plan | A formal document outlining business goals and strategies |
| Capital Expenditure (CapEx) | Funds used by a business to acquire or upgrade physical assets. |
| Cash Flow | The movement of money in and out of a business. |
| Compliance | Adhering to laws, regulations, and standards. |
| Corporate Governance | Systems and processes for directing and controlling a company. |
| Cost of Goods Sold (COGS) | Direct costs attributable to the production of goods sold. |
| Debenture | A type of debt instrument secured against company assets. |
| Depreciation | Reduction in the value of an asset over time. |
| Disclosure Letter | A document outlining exceptions to warranties in a sale. |
| Dividend | A share of profits paid to shareholders. |
| Due Diligence | Investigation or audit of a potential investment or product. |
| Enterprise Investment Scheme (EIS) | A government tax relief scheme for larger, more established businesses (trading up to 7 years with 250 employees) to encourage both individual and corporate investment (up to £1M per year per investor) |
| Equity | Ownership interest in a company. |
| Gross Profit | Revenue minus cost of goods sold. |
| Indemnity | A contractual promise to compensate for loss or damage. |
| Key Performance Indicators (KPIs) | Metrics used to evaluate success. |
| Liabilities | Debts or obligations of a business. |
| Margin | Difference between selling price and cost. |
| Net Profit | Profit after all expenses have been deducted. |
| Operating Expenses (OpEx) | Day-to-day expenses of running a business. |
| Procurement | The process of acquiring goods and services. |
| Return on Investment (ROI) | A measure of profitability. |
| Seed Enterprise Investment Scheme (SEIS) | A government tax relief scheme for early stage businesses (under 3 years trading) to encourage investment from individuals who may deem it high risk. (They invest, you get funds (up to £200,00 per year), and they get tax relief. |
| Stakeholder | Any party with an interest in the business (e.g., employees, investors). |
| SWOT Analysis | Assessment of Strengths, Weaknesses, Opportunities, and Threats. |
| Turnover | Total revenue generated by a business. |
| Value Proposition | The unique value a company offers to customers. |
| Working Capital | Current assets minus current liabilities. |
Can’t find the word you’re looking for? Get in touch and a member of the team will help you.
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