unit 4

Term Definition
corporate finance the area dealing with monetary decisions that corporate enterprises make
managerial finance the area dealing with monetary decisions with all types of companies make, except corporations
personal finance individual taking care of their money
dividends a small payment to each person who owns a stock of a company
liability an obligation, debt or responsibility owed to someone
allocate to distribute according to a plan
capicity the ability of the borrower to repay the loan
Capital the money the entrepreneur has personally invested in the business.
Collateral an asset pledged to the lender as a security for the money being borrowed.
Conditions intended purpose of the loan.
Character general impression the entrepreneur makes on the potential lender as to their trustworthiness to repay the loan.
Interest the cost of borrowing money.
Principal the amount of the loan. Interest rate – a rate which is charged or paid for the use of money.
Assets the resources from which it expects to gain some future benefit.
Liabilities debts owed.
Net worth how much an entity is worth.
Profit a financial gain.
Cash flow amount of money being transferred into and out of a business.
Sales a quantity or amount sold.

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