payroll: A list of employees with the amount that each should be paid.
performance bond: A bond issued to a party to make sure that the other party provides the agreed upon products or services.
prime costs: The cost of all the materials and associated labor needed to produce an item.
prime rate: The interest rate that borrowers with the best credit receive.
private foundation: Groups founded by private individuals alone or in private association.
profit and loss (P&L): The gains and debts or losses that result from running a business.
prospectus: A summary that explains features of a business or venture in enough detail so that investors can decide whether or not to contribute capital to the project.
public company: A company that offers shares to the general public.
publicly traded: A public company that has its shares traded on the open market.
rate of return: The amount of money lost or earned on something as compared to the initial financial investment.
refinance: To discharge a debt by obtaining new financing (a new loan) that usually has a better interest rate.
return on investment (ROI): The amount of money lost or earned on something as compared to the initial financial investment.
revolving credit: A kind of credit that allows borrowers to borrow up to a pre-determined amount, with no fixed number of payments. The return on investment allows a borrower to pay the total upon receipt of the bill or to make monthly payments.
risk: The probability of suffering a loss on an investment.
rule of 72: This rule allows investors to determine how long it will be before their investment doubles. The formula tis simply 72 divided by the current interest rate. For example, if the interest rate is 12 percent, then it will take 6 years for an investment for double (72 / 12 = 6).
s corporation: A type of corporation offered by the IRS that allows companies with less than 75 shareholders the opportunity to be considered a corporation but only be taxed like a partnership.
sandwich lease: A lease in which one person becomes a lessor by subletting real estate they leased from someone else.
small business administration: A federal agency that gives long term loans to small business owners.
subrogation: To substitute one creditor for another. Subrogation also refers to the situation in which one insurance company seeks payment for its insured party from the party that caused damages.
supporting organization: A public charity created by the IRS. It makes grants to, or performs the operations of, a public charity similar to a private foundation.
sweat equity: Labor that results in the increase in value of a property.
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