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Common Business Terms College Students Should Know
Business is one of the most common and popular fields of study worldwide., especially for college and graduate levels. There is quite a high demand when it comes to finance, accounting, management and economic graduates. With business touching almost every aspect of modern society, careers in business degree will continue to be in demand and often, one of the highest paid ones.
If you are thinking of studying a business course or pursuing a master’s degree in business, this is just the perfect starter pack for you. To pursue a career or a degree in business, here are some of the most common business terms ideal to get you started in business college.
Basic Business Terms to Know
Having a good grasp of the basics can help you start ahead of your degree or masters in business. This primer will walk you through the basic business concepts that can help you get started with business school.
The concept of accounting is an important term for your business school arsenal of basic business terms. The term is defined as a systematic way of recording and reporting business financial transactions. It can be complicated and requires a professional to be handled effectively.
Business is about money coming in and coming out of a business. The accounts receivable is the amount of money your customers or clients owe your business. These are payments you are to receive for payments of goods and services. The number gives you a clear overview of how much money is owed to your business at a given time.
On the other hand, the amount of money that you owe from your suppliers and creditors for the goods and services supplied to you is known as accounts payable.
Assets refer to the cumulative financial holdings that your business owns. They can be both current or fixed and usually includes the cash on hand and inventory that your business has. Equipment and land are categorized as fixed or long-term assets.
Liabilities are the opposite of your assets. This is the amount of debt your business owns from a person or entity. Liabilities are also long term and short term. Current or short term liabilities include the accounts payable that you have for your suppliers. Long-term debts can be also in the form of mortgages, car loans or bank loans that a business has.
Cost of Goods Sold
The costs of producing a product that is being sold by a company, may it be material, labor, machinery or overhead expenses is included in the cost of goods sold.
In business, to become successful, it is important to provide clients and customers with superb customer service. Aligning products and services, alongside customer satisfaction is essential to be able to maintain a good ongoing relationship with clients. Repeat orders from satisfied customers is the key to producing lasting revenue for the business.
The amount or cost used to do business and any other cost associated with generating and creating revenue falls under the expense definition.
The amount of profit generated after the cost of goods sold is deducted from the revenue is known as the gross profit. This amount tells how efficiently a company or business is turning their revenues into profit.
Also referred to as the bottom line, this number represents the total revenues less the total expenses in producing, marketing and selling a product or a service. This figure is very important when it is time for paying taxes. Self-employment taxes are a percentage of the net profit.
The total expenses that exceeded your overall revenues is referred to as the net loss. The risk of net loss for businesses is quite high, thus it is important to keep company costs under control.
Return on Investment
The ROI or return of investment is the number that shows how much a business has gained or lost on a business investment relative to the amount of investment that a business has spent on it. The ROI is determined by dividing the net profit by the cost of the investment.
There are plenty of other business terms essential to propel your degree in business. You can start with these terms to familiarize yourself as you continue to learn more concepts and terms related to business.
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