Business glossary

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Calendar Tax Year - 12 consecutive months beginning January 1 and ending December 31.

Call Option - The right to buy the underlying currency or security at a specified price and on a specified date from the option writer/seller.

Calvo Doctrine - A foreign policy doctrine that states that the country in which an investment is located has jurisdiction over that investment.

Canceled Loan - The annulment or recission of an approved loan prior to disbursement.

Cap - In banking and finance, when the interest on borrowed funds is tied to the market rate, an upper limit or a cap can be negotiated and agreed upon, so that even when the market rate is higher than the stated level, no premium will be paid. Business glossary.

Capital - Money available to invest or the total of accumulated assets. available for production.

Capital account - The sum of a company's capital at a particular time.

Capital allowance - The tax advantage that a company is granted for money that it spends on fixed assets.

Capital appreciation - The increase in a company's or individual's wealth.

Capital asset - An asset that is difficult to sell quickly. for example, real estate. Business glossary.

Capital budget - A budget for the use of a company's money.

Capital controls - Regulations placed by a government on the amount of capital residents may hold.

Capital equipment - Equipment that you use to manufacture a product, provide a service or use to sell, store and deliver merchandise. Such equipment will not be sold in the normal course of business, but will be used and worn out or consumed in the course of business.

Capital Expenditures - Business spending on additional plant equipment and inventory. Business glossary.

Capital gains (and losses) - The financial gain made upon the disposal of an asset. The gain is the difference between the cost of its acquisition and net proceeds upon its sale.

Capital goods - Stocks of physical or financial assets that are capable of generating income.

Capital inflow - The amount of capital that flows into an economy from services rendered abroad.

Capitalism - An economic and social system in which individuals can maximize profits because they own the means of production.

Capitalization - The amount of money invested in a company or the worth of the bonds and stocks of a company.

Carrier - An individual or entity that transports persons or goods for compensation under the contract of carriage. Business glossary.

Cartage - The delivery of goods with short distance.

Cash - Money in hand or readily available.

Cash discount - A deduction that is given for prompt payment of a bill.

Cash flow - The actual movement of cash within a business; the analysis of how much cash is needed and when that money is required by a busi­ness within a period of time.

Cash in Advance (CIA) - Payment for goods in which the price is paid in full before the shipment is made. This type of payment is usually only made for very small shipments or when goods are made to order.

Cash Method - Reporting income one receives during the year, usually deducting expenses in the year you pay them.

Cash receipts - The money received by a business from customers.

Centralization - The gathering together, at a corporate headquarters, of specialist functions such as finance, personnel and information technology. Centralization is usually undertaken in order to effect economies of scale and to standardize operating procedures throughout the organization. Centralized management can become cumbersome and inefficient and may produce communication problems. Some organizations have shifted toward decentralization to try to avoid this. Business glossary.

Certificate - A document representing partial ownership of a company that states the number of shares that the document is worth and the names of the company and the owner of the shares.

Certified Public Accountant - An accountant to whom a state has given a certificate showing that he has met prescribed requirements designed to insure competence on the part of the public practitioner in accounting and that he is permitted to use the designation Certified Public Accountant, commonly abbreviated as CPA.

Chamber of Commerce - An organization of business people designed to advance the interests of its members. There are three levels: national, state and local.

Character - A letter, digit, or other symbol, that is a part of the organization, control, or representation of data used in computer systems.

Chief Executive - The person with overall responsibility for ensuring that the daily operations of an organization run efficiently and for carrying out strategic plans. The chief executive of an organization normally sits on the board of directors. In a limited company, the chief executive is usually known as a managing director.  Business glossary.

Chief Executive Officer (CEO) - The highest ranking executive officer within a company or corporation, who has responsibility for over-all management of its day-to-day affairs under the supervision of the board of directors.

Chief financial officer - The officer of the organization responsible for handling finds, signing checks, the keeping of financial records, and financial planning of the company.

Choice - A decision to purchase that is based on an evaluation of alternatives.

Clicks and brick - A business strategy that involves combining the traditional retail outlets with online commerce.

Close corporation - A public corporation in which all of the voting stock is held by a few shareholders, for example, management or family members. Although it is a public company, shares would not normally be available for trading because of a lack of liquidity.

Close-end credit - A loan, plus any interest and finance charges, that is to be repaid in full by a specified future date. Loans that have real estate or motor vehicles as collateral are usually closed-end.

Closing - Actions and procedures required to effect the documentation and disbursement of loan funds after the application has been approved, and the execution of all required documentation and its filing and recordation where required. Business glossary.

Collar - An agreement that fixes the interest rate between a lower and upper boundary, regardless of the market rate.

Collateral - Property or goods used as security against a loan and forfeited to the lender if the borrower defaults.

Collateral Document - A legal document covering the item(s) pledged as collateral on a loan, i.e., note, mortgages, assignment, etc.

Collection Order - In a collection, the document in which the seller instructs the banks as to how the collection is to be conducted. Business glossary.

Collusion - An agreement (usually secret ) among mostly oligopolistic competing firms in an industry to control the market, raise the market price, and otherwise act like a monopoly.

Co-signers - Joint signers of a loan agreement who pledge to meet the obligations of a business in case of default.

Commercial paper - Uncollateralized loans obtained by companies, usually on a short-term basis.  Business glossary.

Commingling - Method of packing a shipment in which various goods subject to differing duties are grouped together. Because of this, the value of each type of item is difficult to determine.

Commission - A percentage of the principal or of the income that an agent receives as compensation for services.

Commonwealth - An association of independent states that promotes cooperation, consultation, and mutual assistance among members. However, such association has no treaty or constitution. Example: the British Commonwealth.

Comparative Advantage - A comparative advantage exists when a nation or economic region is able to produce a product at a lower opportunity cost compared to another nation or region. The rule of economics that states that each country should specialize in producing those goods that it is able to produce relatively most efficiently. Business glossary.

Compound Interest - Interest that is earned both on the initial principal and on interest earned on the initial principal in previous periods. The interest earned in one period becomes in effect part of the principal in a following period.

Consignor - A consignor is an individual entity, partnership or a company that ships its goods to another party to be taken care of. A consignor is usually an exporter.

Consolidated Income - The sum of income across all of the multinational corporation’s domestic and foreign subsidiaries.

Consolidation - A form of corporate reorganization in which two firms pool their assets and liabilities to form a new company. The term can also be used for shipping, in which a freight consolidator combines shipments of cargo that are less than truckload (LTL) in order to reduce shipping rates.

Consortium - A coalition of organizations, such as banks and corporations, set up to fund ventures requiring large capital resources.

Contract - An agreement regarding mutual responsibilities between two or more parties.

Controllable expenses - Those expenses that can be controlled or restrained by the business person.

Corporate Culture - The set of values, beliefs, relationships between individuals and functions that guide the decisions of a company to achieve its objectives.

Corporation - A voluntary organization of persons, either actual indi­viduals or legal entities, legally bound together to form a business enter­prise; an artificial legal entity created by government grant and treated by law as an individual entity. Business glossary.

Cost and Freight - A pricing term that indicates that the cost of the goods and freight charges are included in the quoted price.

Cost of goods sold - The direct cost to the business owner of those items which will be sold to customers.

Countervailing Duties - Duties levied on an imported good that has been unfairly subsidized by a foreign government. Imposing duties on the good is meant to raise the product's price to a "fair market value".

Credit - Another word for debt. Credit is given to customers when they are allowed to make a purchase with the promise to pay later. A bank gives credit when it lends money.

Credit line - The maximum amount of credit or money a financial insti­tution or trade firm will extend to a customer.

Current assets - Valuable resources or property owned by a company that will be turned into cash within one year or used up in the operations of the company within one year. Generally includes cash, accounts receivable, inventory and prepaid expenses. Business glossary.

Current liabilities - Amounts owned that will ordinarily be paid by a company within one year. Generally includes accounts payable, current portion of long-term debt, interest and dividends payable.

Customhouse Broker - A person or firm obtains the license from the treasury department of its Country when required, and help clients (importers) to enter and declare goods through customs.

Customs - The authorities designated to collect duties levied by a country on imports and exports.