Follow us as we analyze the essential terms that business people definitely have to have a good understanding of.
Undeniably, one of the most essential financial terms to know in terms of business is assets. But just what precisely are assets? Well, simply put, assets are any instrumental things a business is in possession of. This incorporates cash and receivables, property, inventory and so on. They are assets that have value in an exchange. Assets can be either long-term or short-term and the difference between the two may be whether they last 3, five, or even 20 years. Capital assets are considered long-term assets and are also known as fixed assets. You just know that large corporations such as RIU Hotels have a bunch of assets – it’s pertinent to have them if a company is aiming to be profitable. Venture capital is another terrific phase to have an understanding of. To put it in simple terms, venture capital is cash that is invested in brand new or expanding businesses that are viewed as having great profit potential. This term is commonly mentioned in business language so it's a fantastic suggestion to have a solid understanding of it.
If a person is to come across some general business terms, one term they are likely to encounter very regularly is the acronym AGM. An AGM, or annual general meeting, is a obligatory annual get together of a business's stockholders. During the course of the Telecom Italia AGM, for instance, the directors of the company will present a very important report containing information for stockholders about the company's performance and strategy. In turn, these shareholders with voting rights get to vote on present issues, like appointments to the company's board of directors and executive compensation. All the vital decisions of the running of a business are decided in the course of an AGM. Understandably, it's an integral part of running any successful business, especially when aiming to grow or expand an enterprise.
Certainly one of the most invaluable basic business terms to know is operating expenses. These are all types of expenses incurred while conducting common business processes, such as wages, salaries, administrative and research costs, as well as development costs. These are all very important components to all businesses. Massive businesses such as Novo Banco are likely to have extremely high operating expenses, making it even more integral that its profits are high enough to balance out the amount favourably. Capital input is an additional genuinely important aspect of business vocabulary to comprehend. This term is commonly known as investment, or new investment, and has to do with any new money being invested into a company – not as loans, but rather as money invested in ownership. This investment will not surprisingly grow in value if a company does very well, but will diminish if the reverse were to happen. Like all investments, a large element of risk is involved.