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Glossary of Business Terms
Your guide to the definitions of common business terms.

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N

NASDAQ:  National Association of Security Dealers Automated Quotation system, a screen-based quotation system supporting market making in registered equities.  

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negotiation: a discussion with the aim of resolving a difference of opinion, or dispute, or to settle the terms of an agreement or transaction.      

net assets: the amount by which the value of a company's assets exceeds its liabilities. 

net capital: the amount by which assets exceed the value of assets not easily converted to cash. 

net cash balance: the amount of cash that is on hand.  

net errors and omissions: the net amount of the discrepancies that arise in calculations of balances of payments.  

net fixed assets: the value of fixed assets after depreciation.  

net margin: the percentage of revenues that is profit.

net operating income: the amount by which income exceeds expenses, before considering taxes and interest 

net proceeds: the amount realized from a transaction minus the cost of making it. 

net profit: gross profit minus costs.

net worth: The total value of a business in financial terms. Net worth is calculated by subtracting total liabilities from total assets.

niche: A well-defined group of customers for which what you have to offer is particularly suitable.  

no-load fund: a mutual fund that does not charge a fee for purchase or sale of shares.  

nondisclosure agreement: a legally enforceable agreement preventing present or past employees from disclosing commercially sensitive information belonging to the employer to any other party.  

nonrecurring: One time, not repeating. "Nonrecurring" expenses are those involved in starting a business, and which only have to be paid once and will not occur again.

note: A document that is recognized as legal evidence of a debt.

O 

objective: an end toward which effort is directed and on which resources are focused, usually to achieve an organization's strategy. 

obsolescence: the decline of products in a market due to the introduction of better competitor products or rapid technology developments.  

open-end credit: a form of credit that does not have an upper limit on the amount that can be borrowed or a time limit before repayment is due. 

open market: a market that is widely available.  

operating cash flow: the amount used to represent the money moving through a company as a result of its operations, as distinct from its purely financial transactions. 

operating costs: Expenditures arising out of current business activities. The costs incurred to do business such as salaries, electricity, rental. Also may be called "overhead."  

optimize: to allocate such things as resources or capital as efficiently as possible. 

option: a contract for the right to buy or sell an asset, typically a commodity, under certain terms.

order: a contract made between a customer and a supplier for the supply of a range of goods or services in a determined quantity and quality, at an agreed price, and for delivery at or by a specified time.  

organizational market: A marketplace made up of producers, trade industries, governments and institutions.

outsourcing: Term used in business to identify the process of sub-contracting work to outside vendors. The transfer of the provision of services previously carried out by in-house personnel to an external organization, usually under a contract with agreed standards, costs, and conditions.

overdraft: the amount by which the money withdrawn from a bank account exceeds the balance of the account. 

overdraft facility: a credit arrangement with a bank, allowing a person or company with an account to use borrowed money up to an agreed limit when nothing is left in the account. 

overdrawn
: in debt to a bank because the amount withdrawn from an account exceeds its balance. 

outsourcing: Term used in business to identify the process of sub-contracting work to outside vendors

overhead: A general term for costs of materials and services not directly adding to or readily identifiable with the product or service being sold.  

Overprice: to set the price of a product or service too high, with the result that it is unacceptable to the market. 

 

 

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