Page 167 - Agri-Business Management Handbook

APPENDIX ii: GLOSSARY OF KEY TERMS

Accounting - collecting, analyzing and communicating financial information to the
users.
Assets - resources owned and controlled by the entity as a result of past events.
Bank overdraft - arrangement with a bank to overdraw one’s account.
Breakeven point - point at which the business does not make any profits or losses
Business acumen - the ability to execute business ideas and use those ideas to form
a viable enterprise
Business angels - individuals who finance business startups.
Business model - a conceptual presentation of the activities that a business
undertakes to actualize the business idea or to translate the business idea in to
action.
Cash flows from financing activities - cash inflows and outflows that relate to the
long-term financing of the business.
Cash flows from investing activities - cash inflows and outflows that relate to
purchase and disposal of non-current assets and receipt of investment incomes.
Cash flows from operating activities - cash inflows and outflows from the main
activities of the business.
Cost leadership - producing at the lowest cost possible in the industry.
Cost of sales – direct costs associated with the goods sold.
Cost structure – the ratio of fixed and variable costs in the business.
Credit limit – maximum credit amount that should be advanced to a customer.
Credit policy – guidelines which a business should follow in determining the credit to
advance. It should stipulate the credit terms and guidelines on collection of debts.
Current liabilities – debts that are expected to be settled within one financial year.
Differentiation - being unique or different from the competitors.
Equity – owner supplied capital.
Entrepreneurs – highly proactive individuals who seek to innovate and take risk to
exploit an opportunity.
Entrepreneurship - starting a business by mobilizing resources and exploiting
opportunities.
Environmental scanning - diagnostic analysis of the external and internal environment
of the business and identifying the main issues that must be addressed for the
business to survive in the long-term.
Extensive distribution – use distribution channels that reach as many customers as
possible.
Finance – study of the way funds are raised and deployment to the various resources
needed in the business in the most efficient manner.
Financial ratios - numbers that are calculated to assess the financial health of a
business.
Fixed costs – costs that do not change regardless even when production is increased.

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