Business terminology

20 Business Terminology Words with Meanings and Examples

1. Revenue: The income generated by a company through sales of goods or services.

• Example: The company’s revenue increased by 10% last year.

2. Profit: The amount of money a company earns after deducting expenses.

• Example: The company’s profit margin is 20%.

3. Expense: A cost incurred by a company in the course of doing business.

• Example: The company’s expenses increased due to rising energy costs.

4. Market Share: The percentage of a market that a company controls.

• Example: The company has a 25% market share in the smartphone industry.

5. Brand Equity: The value of a brand in the marketplace.

• Example: The company has strong brand equity, which helps it command premium prices for its products.

6. Customer Acquisition Cost (CAC): The cost of acquiring a new customer.

• Example: The company’s CAC is $100 per customer.

7. Customer Lifetime Value (CLTV): The total revenue a company can expect to generate from a customer over their lifetime.

• Example: The company’s CLTV is $1000 per customer.

8. Return on Investment (ROI): A measure of how much profit a company earns for every dollar it invests.

• Example: The company’s ROI on the new marketing campaign was 20%.

9. Cash Flow: The movement of money into and out of a company.

• Example: The company’s cash flow is negative due to increased inventory costs.

10. Inventory: The stock of goods held by a company for sale.

• Example: The company’s inventory levels are high due to slow sales.

11. Accounts Receivable: Money owed to a company by its customers.

• Example: The company’s accounts receivable balance is $1 million.

12. Accounts Payable: Money owed by a company to its suppliers.

• Example: The company’s accounts payable balance is $500,000.

13. Debt: Money owed by a company to others.

• Example: The company’s debt-to-equity ratio is 2:1.

14. Equity: The ownership interest in a company.

• Example: The company’s equity is worth $10 million.

15. Market Capitalization: The total value of a company’s outstanding shares.

• Example: The company’s market capitalization is $5 billion.

16. Dividend: A payment made to shareholders from a company’s profits.

• Example: The company paid a dividend of $1 per share.

17. Merger: The combination of two or more companies into a single entity.

• Example: The two companies announced a merger to create a larger, more competitive business.

18. Acquisition: The purchase of one company by another.

• Example: The company acquired a smaller competitor to expand its market share.

19. Bankruptcy: The legal process of declaring a company unable to pay its debts.

• Example: The company filed for bankruptcy after experiencing financial difficulties.

20. Economic Indicator: A statistical measure used to assess the economic health of a country or region.

• Example: The GDP is a key economic indicator.