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Dictionary

A-Z


Asset

any tangible or intangible item to which a value can be assigned. Assets can be physical, such as machinery and consumer durables, or financial, such as cash and accounts receivable, or intangible, such as brand value and goodwill.


Audit

systematic examination of firm's activities and records, a systematic examination of the activities and status of an entity, based primarily on investigation and analysis of its systems, controls, and records.


Balance

1. Banking

money in bank account, the state of a bank account at any one time, indicating whether money is owed (a debit) or owing (a credit balance)

2. Accounting

discrepancy between debit and credit figures, in double-entry bookkeeping, the amount required to make the debit and credit figures in the books equal each other

3. Accounting

difference between money paid and received, the difference between the totals of the debit and credit entries in an account


Business Plan

a document describing the current activities of a business, setting out its goals and objectives and how they are to be achieved over a set period of time. A business plan may cover the activities of an organization or a group of companies, or it may deal with a single department within the organization. In the former case, it is sometimes referred to as a corporate plan. The sections of a business plan usually include a market analysis describing the target market, customers, and competitors, an operations plan describing how products and services will be developed and produced, and a financial section providing profit, budget, and cash flow forecasts, annual accounts, and financial requirements. Businesses may use a business plan internally as a framework for implementing strategy and improving performance or externally to attract investment or raise capital for development plans. A business plan may form part of the overall corporate planning process within an organization and be used for the implementation of a company's strategy.


Strategy

structured course of action for longer-term objectives, a planned course of action undertaken to achieve the goals and objectives of an organization. The overall strategy of an organization is known as corporate strategy, but strategy may also be developed for any aspect of an organization's activities such as environmental management or manufacturing strategy.


Bond

Basically a bond is labeled as a debt security. In this case an authorized issuer is involved, who owes a debt to the holder, which he’s supposed to repay the principal amount as well as the interest at a later set date. This later date or day is known as the maturity date or day.

In other words a bond is a loan in the form of a security following different terms and conditions. In this case the lender is the bond holder, the issuer is the borrower and finally the coupon is the interest. Bonds can be used by the person or persons to expand their business, garage, showroom renovation etc. depending on the type of business they are doing, instead of taking loans in such circumstances, many companies opt to give out bonds by way of which the issuer as well as the holder is benefited, since the holder if he keeps the same amount of money in hand, its not going to multiply, but on the contrary if he invests in bonds, hes going to benefit and the issuer as well doesnt have to hunt around for finances from other external sources.

Bonds and stocks are almost the same, but the major difference is in case of stocks the stock-holders are owners of the company. It means the stock-holders have an equity share, while in case of bond-holders they have the status of only ordinary lenders; they dont possess any other rights whatsoever and hence are at a disadvantage.

The second major difference is that bonds have a fixed maturity date, while stocks can even be kept indefinitely with you, theres no restriction on that whatsoever. Moreover the bonds need to be redeemed after the maturity period, while stocks do not have any such strings attached to it.


Exchange

1. Markets

place for buying and selling, a market where goods, services, or financial instruments are bought and sold

2. Stockholding & Investments

converting one form of security to another, the conversion of one type of security for another, for example, the exchange of a bond for stock

3. E-Commerce

environment for conducting business, the main type of business-to-business marketplace. The B2B exchange enables suppliers, buyers, and intermediaries to come together and offer products to each other according to a set of criteria. B2B Web exchanges provide constant price adjustments in line with fluctuations of supply and demand. In E2E or "exchange-to-exchange" e-commerce, buyers and sellers conduct transactions not only within exchanges but also between them.

4. Finance

barter, to trade goods and services for other goods and services

5. Currency & Exchange

trade one country's currency for another, to trade the currency of one country or economic zone for that of another


Gross Domestic Product (GDP)

otherwise known as GDP, is an economic measurement that monitors the overall income and output of a country. It is a way to interpret the overall prosperity of the economy. It is calculated on an annual basis with quarterly updates.

There are a number of factors that go into the calculation of GDP, some more widely used than others. The most common calculation takes in to account:
- All of the count
ry’s consumer spending. (A)
- All of the countrys governmental spending. (B)
- All of the countrys business spending. (C)
- The total income from the countrys annual exports. (D)
- Minus the total value of imports. (E)
Therefore GDP = A + B + C + D - E

Sometimes GDP is calculated by taking the monetary value from the total amount of products produced in the year, although that doesnt necessarily mean all of those products were bought, so therefore this method is less accurate than the above method. There are of course many transactions that fall under the governments radar (this is known as underground spending), so GDP is only a rough guide.

The data produced by GDP is interpreted in a number of ways. Some use it to measure the productivity of the country, in that it shows how much product was produced and sold. Others use it to measure the general health of the economy and the standard of living of those living in it. For example during an economic recession there is likely to be less consumer spending.

All economies are looking for a consistent amount of growth in GDP each year. Historically the annual GDP growth in the United States has been 2.5 to 3 percent.

A similar calculation is Gross National Product which takes in to account products produced by domestic firms operating in other countries.


Devaluation

reduction of official currency exchange rate, a reduction in the official fixed rate at which one currency exchanges for another under a fixed-rate regime, usually to correct a balance of payments deficit


Dumping

selling commodity abroad at greatly reduced price, the selling of a commodity on a foreign market at a price below its marginal cost, either to dispose of a temporary surplus or to achieve a monopoly by eliminating competition — dump.


Denomination

value on coin, banknote, or stamp, a unit of money imprinted on a coin, banknote, or stamp.


Dividend

profits paid to stockholders, part of a company's net profits paid out to qualified stockholders at a fixed amount per share


Investment

1. Finance

expenditure on assets and securities, the spending of money on stocks and other securities, or on assets such as plant and machinery

2. Finance

something invested in, something such as stocks, real estate, or a project in which money is invested in the expectation of making a profit

3. Stockholding & Investments

money invested, an amount of money invested in something in the expectation of making a profit


Incoterms

The INCOTERMS (International Commercial Terms) is a universally recognized set of definitions of international trade terms, such as FOB, CFR and CIF, developed by the International Chamber of Commerce (ICC) in Paris, France. It defines the trade contract responsibilities and liabilities between buyer and seller. It is invaluable and a cost-saving tool. The exporter and the importer need not undergo a lengthy negotiation about the conditions of each transaction. Once they have agreed on a commercial term like FOB, they can sell and buy at FOB without discussing who will be responsible for the freight, cargo insurance, and other costs and risks.

The INCOTERMS was first published in 1936 – INCOTERMS 1936 and it is revised periodically to keep up with changes in the international trade needs. The complete definition of each term is available from the current publication INCOTERMS 2000. The publication is available at your local Chamber of Commerce affiliated with the International Chamber of Commerce (ICC).

Many importers and exporters worldwide are accustomed to and may still use the INCOTERMS 1980, the predecessor of INCOTERMS 1990 and INCOTERMS 2000.


EXW {+ the named place}
Ex Works

Ex means from. Works means factory, mill or warehouse, which is the seller's premises. EXW applies to goods available only at the seller's premises. Buyer is responsible for loading the goods on truck or container at the seller's premises, and for the subsequent costs and risks.

In practice, it is not uncommon that the seller loads the goods on truck or container at the seller's premises without charging loading fee.

In the quotation, indicate the named place (seller's premises) after the acronym EXW, for example EXW Kobe and EXW San Antonio.

The term EXW is commonly used between the manufacturer (seller) and export-trader (buyer), and the export-trader resells on other trade terms to the foreign buyers. Some manufacturers may use the term Ex Factory, which means the same as Ex Works.


FCA {+ the named point of departure}

Free Carrier

The delivery of goods on truck, rail car or container at the specified point (depot) of departure, which is usually the seller's premises, or a named railroad station or a named cargo terminal or into the custody of the carrier, at seller's expense. The point (depot) at origin may or may not be a customs clearance center. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

In the air shipment, technically speaking, goods placed in the custody of an air carrier is considered as delivery on board the plane. In practice, many importers and exporters still use the term FOB in the air shipment.

The term FCA is also used in the RO/RO (roll on/roll off) services.

In the export quotation, indicate the point of departure (loading) after the acronym FCA, for example FCA Hong Kong and FCA Seattle.

Some manufacturers may use the former terms FOT (Free On Truck) and FOR (Free On Rail) in selling to export-traders.


FAS {+ the named port of origin}
Free Alongside Ship

Goods are placed in the dock shed or at the side of the ship, on the dock or lighter, within reach of its loading equipment so that they can be loaded aboard the ship, at seller's expense. Buyer is responsible for the loading fee, main carriage/freight, cargo insurance, and other costs and risks.

In the export quotation, indicate the port of origin (loading) after the acronym FAS, for example FAS New York and FAS Bremen.

The FAS term is popular in the break-bulk shipments and with the importing countries using their own vessels.


FOB {+ the named port of origin}
Free On Board

The delivery of goods on board the vessel at the named port of origin (loading), at seller's expense. Buyer is responsible for the main carriage/freight, cargo insurance and other costs and risks.

In the export quotation, indicate the port of origin (loading) after the acronym FOB, for example FOB Vancouver and FOB Shanghai.

Under the rules of the INCOTERMS 1990, the term FOB is used for ocean freight only. However, in practice, many importers and exporters still use the term FOB in the air freight.

In North America, the term FOB has other applications. Many buyers and sellers in Canada and the U.S.A. dealing on the open account and consignment basis are accustomed to using the shipping terms FOB Origin and FOB Destination.

FOB Origin means the buyer is responsible for the freight and other costs and risks. FOB Destination means the seller is responsible for the freight and other costs and risks until the goods are delivered to the buyer's premises, which may include the import customs clearance and payment of import customs duties and taxes at the buyer's country, depending on the agreement between the buyer and seller.

In international trade, avoid using the shipping terms FOB Origin and FOB Destination, which are not part of the INCOTERMS (International Commercial Terms).


CFR {+ the named port of destination}

Cost and Freight

The delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the cargo insurance and other costs and risks. The term CFRwas formerly written as C&F. Many importers and exporters worldwide still use the term C&F.

In the export quotation, indicate the port of destination (discharge) after the acronym CFR, for example CFR Karachi and CFR Alexandria.

Under the rules of the INCOTERMS 1990, the term Cost and Freight is used for ocean freight only. However, in practice, the term Cost and Freight (C&F) is still commonly used in the air freight.


CIF {+ the named port of destination}

Cost, Insurance and Freight

The cargo insurance and delivery of goods to the named port of destination (discharge) at the seller's expense. Buyer is responsible for the import customs clearance and other costs and risks.

In the export quotation, indicate the port of destination (discharge) after the acronym CIF, for example CIF Pusan and CIF Singapore.

Under the rules of the INCOTERMS 1990, the term CIF is used for ocean freight only. However, in practice, many importers and exporters still use the term CIF in the air freight.


CPT {+ the named place of destination}
Carriage Paid To

The delivery of goods to the named place of destination (discharge) at seller's expense. Buyer assumes the cargo insurance, import customs clearance, payment of customs duties and taxes, and other costs and risks.

In the export quotation, indicate the place of destination (discharge) after the acronym CPT, for example CPT Los Angeles and CPT Osaka.


CIP {+ the named place of destination}
Carriage and Insurance Paid To

The delivery of goods and the cargo insurance to the named place of destination (discharge) at seller's expense. Buyer assumes the import customs clearance, payment of customs duties and taxes, and other costs and risks.

In the export quotation, indicate the place of destination (discharge) after the acronym CIP, for example CIP Paris and CIP Athens.


DAF {+ the named point at frontier}
Delivered At Frontier

The delivery of goods to the specified point at the frontier at seller's expense. Buyer is responsible for the import customs clearance, payment of customs duties and taxes, and other costs and risks.

In the export quotation, indicate the point at frontier (discharge) after the acronym DAF, for example DAF Buffalo and DAF Welland.


DES {+ the named port of destination}
Delivered Ex Ship

The delivery of goods on board the vessel at the named port of destination (discharge), at seller's expense. Buyer assumes the unloading fee, import customs clearance, payment of customs duties and taxes, cargo insurance, and other costs and risks.

In the export quotation, indicate the port of destination (discharge) after the acronym DES, for example DES Helsinki and DES Stockholm.


DEQ {+ the named port of destination}

Delivered Ex Quay

The delivery of goods to the quay (the port) at destination at seller's expense. Seller is responsible for the import customs clearance and payment of customs duties and taxes at the buyer's end. Buyer assumes the cargo insurance and other costs and risks.

In the export quotation, indicate the port of destination (discharge) after the acronym DEQ, for example DEQ Libreville and DEQ Maputo.


DDU {+ the named point of destination}

Delivered Duty Unpaid

The delivery of goods and the cargo insurance to the final point at destination, which is often the project site or buyer's premises, at seller's expense. Buyer assumes the import customs clearance and payment of customs duties and taxes. The seller may opt not to insure the goods at his/her own risks.

In the export quotation, indicate the point of destination (discharge) after the acronym DDU, for example DDU La Paz and DDU Ndjamena.


DDP {+ the named point of destination}

Delivered Duty Paid

The seller is responsible for most of the expenses, which include the cargo insurance, import customs clearance, and payment of customs duties and taxes at the buyer's end, and the delivery of goods to the final point at destination, which is often the project site or buyer's premises. The seller may opt not to insure the goods at his/her own risks.

In the export quotation, indicate the point of destination (discharge) after the acronym DDP, for example DDP Bujumbura and DDP Mbabane.


Vertical merger

combining of firms in same supply chain, the amalgamation of two or more organizations from the same supply chain under single ownership, through the direct acquisition by one organization of the net assets or liabilities of the other.


Outsourcing

1. switching from in-house personnel to outside supplier, the transfer of the provision of services previously performed by in-house personnel to an external organization, usually under a contract with agreed standards, costs, and conditions. Areas traditionally outsourced include legal services, transport, catering, and security. An increasing variety of activities, including IT services, training, and public relations are now being outsourced. Outsourcing, or contracting out, is often introduced with the goal of increasing efficiency and reducing costs, or to enable the organization to develop greater flexibility or to concentrate on core business activities. The term subcontracting is sometimes used to refer to outsourcing.

2. obtaining goods or services from outside suppliers, the use of external suppliers as a source of finished products, components, or services


Margin

gap between cost and selling price the difference between the cost and the selling price of a product or service ANZ extra pay for employees' special skills a payment made to workers over and above


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