April 2011
31 posts
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Bayesian Statistics
Statistical methods that incorporate prior judgment in addition to evidence and reasoning.
Usage: The team used Bayesian statistics to update their estimates of the probability of success now that they had some experience to take into consideration.
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Accounts Receivable
Amounts due from customers who made ordinary purchases that they will pay for later. Also called A/R or trade receivables.
Usage: The payment terms on accounts receivable vary by industry.
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Factoring
A method of raising cash that requires the borrower to have sales contracts before the lender will get involved. Also referred to as financing accounts receivable.
Usage: The temp agency needed to pay its workers before it could invoice its client; by it had enough cash to pay the employees.
Goodwill
A type of intangible asset that results from purchasing a company for more than the fair value of its assets and liabilities.
Usage: Because Alpha Co. paid $5 million more than fair value for Beta Corp., it now has $5 million of goodwill on its balance sheet.
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Iterative
Both incremental and repetitive. As more information is learned it changes the original concept for the better. It is never finished, only “finished for now.”
Usage: Working on a business plan is an iterative process. Each version is more complete.
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Emoticon
The arrangement of keyboard symbols to indicate (usually when viewed sideways) an emotion. Examples: a smiling face :) or a wink ;).
Usage: People use emoticons in email messages to provide context about mood or attitude.
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Book Value
The net value of an asset as it appears on a balance sheet: original purchase price less accumulated depreciation.
Usage: The book value of the machinery purchased 10 years earlier was only $100, even though its market value was $1,000.
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Business Case
An organized report with financial analysis and supporting documentation to support a business proposition. Sometimes refers only to the financial justification for a business opportunity. Sometimes used interchangeably with “business plan.”
Usage: The business case demonstrates that our idea will be profitable within three years.
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Recurring Expense
An outflow of money related to normal business operations that is expected to recur regularly.
Usage: Rental payments are an example of a recurring expense.
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Risk and Contingency Plan
An analysis of external and internal events that can jeopardize a project’s completion, along with suggested alternative actions.
Usage: By developing risk and contingency plans an organization is prepared to respond to unplanned events.
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Strategic Fit
A match between corporate objectives and goals and the benefits a new service or product will provide to the corporation.
Usage: When the automobile company decided to sell bicycles, many questioned the strategic fit.
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Tangible Asset
An asset that is physical in nature and can be seen or touched.
Usage: Inventory and equipment are tangible assets.
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Monetize
The process of turning something into cash money or legal tender. Can refer to things as well as ideas.
Usage: The challenge for many web-based businesses is figure out how they will monetize their idea or their traffic.
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Zombie
A computer that has been taken over by another computer, from a distance, usually by a hacker or by someone with a malicious motive.
Usage: My computer has turned into a zombie; it just does things without my knowing about it.
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Willingness to Pay
The value a buyer places on a product or service. Frequently used to identify the maximum amount of money a customer is willing to spend.
Usage: Looking at competitor pricing is one method of investigating willingness-to-pay.
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Productize
The process of turning a thing, idea, or service into an organized product for sale.
Usage: We’ll have to productize that service before advertising to generate sales.
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Raw Material
A component that becomes a part of the product being manufactured. Also called direct material.
Usage: Tomatoes are a raw material for the manufacturing of spaghetti sauce.
Update
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Prepaid Asset
The unused portion of a purchase that will be used over time but is paid for in advance. Also referred to as a prepaid expense.
Usage: Although we pay for our property insurance once a year, each month we reduce the prepaid asset account for 1/12 of the insurance premium and recognize it as an expense.
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Statement of Financial Position
A financial statement that shows the balances of a company’s assets, liabilities, and shareholders’ equity as of a certain date. Also called a balance sheet.
Usage: The bank wanted to see the company’s statement of financial position before it would approve the loan.
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Risk
The potential for one or more expected future events to either not take place at all or to occur in some other way than was expected. Also, the possibility of suffering harm or loss.
Usage: Market risk refers to customer behavior; credit risk refers to the potential for default.
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Work in Process
The cost of all direct (raw) materials, direct labor, and associated overhead for goods that are in the middle of the manufacturing process. This cost might be tallied at the end of a month. Abbreviated as WIP and pronounced wip.
Usage: Our work in process balance included 90% of the raw materials but only 50% of the direct labor.
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Straw Man
A hypothetical situation or plan that is used to focus a discussion. Frequently an idea or notion that is not expected to be the complete solution.
Usage: The team put forth a straw man to get management’s response.
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Proprietary
Private systems and software that are frequently protected by copyright laws and patents.
Usage: The proprietary systems provided a competitive edge.
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Merger of Equals
The combining of two companies that are of the same size and strength.
Usage: A merger of equals implies that neither acquired or purchased the other.
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mgmt
A common abbreviation for the word “management.”
Usage: The mgmt course was held on Tuesdays.
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Modem
The computer or electronic equipment that allows information to be transmitted from a computer to the telecommunications transmission link. Short for modulator/demodulator.
Usage: Without a modem of some kind, it is impossible to connect to the Internet.
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Brand Advertising
A marketing effort to create and promote a company’s identity (as compared to a product’s identity) with its customers and in the media.
Usage: Coca-Cola’s distinctive red and white signature is used in its brand advertising throughout the world.
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Downsize
To reduce in size. Frequently refers to the reduction associated with a company or an organization.
Usage: Several people lost their jobs when the company downsized the department.
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Identity
The characteristics that the mention of use of a company name brings to mind.
Usage: Walmart has been working hard to shift its identity from being stingy with its employees to being a great place to work.
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Functional Organizations
The various departments or organizations associated with creating a new product or service.
Usage: Accounting, sales, and installation are some of the functional organizations needed to make sure that customers are billed correctly.
