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Jargon & Buzzwords When to use and not use them
If you need to use a Buzzword in a document simply to make the verbiage less, explain the meaning of that term the first time you use it. Don’t assume that everyone is in the same club and already know what you're saying. They aren’t and likely they don’t, even if they are nodding their head.
No one likes to be made to feel uninformed (stupid), you don’t and your colleagues and customers won’t.
The whole point in communication is to be understood, not piss people off, that Ego-thing again. Here are some business Buzzwords that may help you be informed.
Acid Test (Quick Ratio) - Refers to the current cash and “near cash assets. It shows how quickly cash can be found if the company gets in trouble.
Boiler Plate – Standard terms and conditions found in any contract.
Bridging / Bridge Loans – A short term loan to cover company activities until more permanent financing can be found.
Buy-Sell – A legal agreement between two or more shareholders setting out the conditions under which each may sell their shares of the company.
Buyer’s Market – The buyer has more power than the seller and therefore more control of the negotiation.
Channels – official courses of transmission of communications or delivery.
CA - Confidentiality Agreement, a.k.a. Non-disclosure agreement. “I won’t tell your secrets. You don’t tell mine.”
Core Competency – The obvious experience and capabilities of the company and individuals.
Current Ratio – Current assets compared with current liabilities.
CV – Coefficient of Variability
Debenture – A formal written obligation of the company to a specific amount by a specific date(s).
Deal Points – The specifics of the transaction being discussed.
Due Diligence – In legal terms, Diligence is the required degree of attention or care expected of a person in a given situation. In a business sense, both parties are required to find out all information that is necessary for them to make an informed decision.
EPS (Earnings per Share) – The company earnings divided by the number of shares of common stock outstanding. In a publicly traded company EPS is usually expressed “after taxes”. In a privately held company EPS is usually expressed “pre-tax”.
Equity – The difference between the assets and liabilities of the company. It is also sometimes know as “Net Worth”. The equity is the property of the shareholders, a.k.a. the equity holders.
Exposure – The chance of having liability or involvement in a situation. (See, Risk).
Grant Psychology – The belief that the sole purpose of an organization is to do good research and obtain another grant. Producing a product for the market is not a priority.
Hot Buttons – For Accounting: Key operational information that can give early indications of the health of a company.
Killer App. - The Killer Application, the utilization of the company technology that will hit the market and sell BIG. The best utilization of the core technology.
Leverage – The ratio in which debt exceeds equity. A healthy ratio is usually no more than 2:1 or 3:1.
Liquidity – The ability to turn assets into cash. Often the Quick Ratio is used. (See, Acid Test).
Negative Covenant – An undertaking to not do certain things.
NDA – Non-Disclosure Agreement, a.k.a. Confidentiality Agreement. “I won’t tell your secrets. You don’t tell mine.”
NPV – Net Present Value
OTC – Over the counter
OTS – Off the shelf
Par Value – The stated face value of a certificate. It rarely has any relation with the actual traded or book value of a stock.
Piggyback – A clause which allows a party the same rights as another if the other takes certain actions.
Revenue – From the Latin, reventio, meaning, to return. The cash coming into the company.
Ride – To go with it. Being involved in the endeavor.
Risk – Potential negatives; cash, stock, legal. (See, Exposure)
ROI – Return on Investment
Reward Center - Where the cash comes from.
Shares (stock) – Common – The holder of common stock share in the risk and reward of the company. They usually have a vote in electing the members of the Board of Directors relative to one vote per share.
Shares (stock) – Preferred – They have some features of both debt and common stock. They rank ahead of common stock in case of company liquidation. Usually Preferred Stock has a Par Value and the share holders claim is limited to that amount.
Shotgun – A clause in a buy-sell agreement whereby, if one party offers to buy out the other at a certain price, the other party has, within a limited period, either to accept the price or buy the offerer out at the same price.
Sweat Equity – Working for equity compensation only.
Traction – a drawing or a pulling. “Does anyone believe what you are saying?”
Upside – Potential positive results in power, influence, cash or stock.
REFERENCES:
The Vest-Pocket MBA, 2nd ed. J.K. Shim, J.G. Siegel, A.J. Simon, Prentice Hall, NJ. 1997. |
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