Glossary

bid - the offer at a certain price for the shares of a company with the aim of taking control of that company

break-even point - the point in time, sales or production when total revenues equal total costs, i.e. the point after which a profit will be made

Budget overruns - the amount by which the money spent on a particular project exceeds the money budgeted for that project

C.E.O. ( Chief Executive Officer) - the member of a company's board ultimately responsible for the decisions taken. This title now often replaces the term managing director in larger British companies

capacity – the maximum number of units that a particular factory or production centre is able to produce over a period

cash flow - the net difference between cash coming into a company and cash going out of a company at any one time, e.g. a negative cash flow means that there is more cash being spent by a company than is being received by a company at a particular point in time

collaboration – the commitment of resources by two separate companies to a common venture or project, e.g. a joint venture

conflict of interest – a term used to describe areas of mutual activity where two sides committed to an agreement may find themselves acting against the interests of each other

corporate treasurer - the company executive responsible for the management of that company's overall finances

cumulative cash flow - the net difference between the total amount of cash that has flowed into a company over a period of time and the total amount that has flowed out of the company over the same period

economies of scale – the extra savings to be got from producing large quantities of product as against small quantities

equity – a more formal term for share

exploratory session – a negotiating session devoted to discovering what is possible and what is not possible

fallback position – the position to which one side in a negotiation is willing to retreat if it cannot achieve its ideal target

first half figures - the balance sheets and profit and loss accounts relating to the first six months of a company's financial year

fixed price contracts – contracts to supply goods and services for a price which is fixed for the period of the contract

greenfield site - a site for a factory on new land as opposed to an existing industrial location

insolvent – no longer able to meet its financial commitments. This will probably mean that the company is either in or about to go into liquidation

joint venture - a company established jointly by two separate companies with a view to sharing risks, costs and income

knock-down price - a very low price

launch expenses - the expenditure needed to launch a new product into the market, e.g. advertising, promotion, sales trips

licence – an official document giving you permission to own or do something for a particular period and/or in a defined territory

open to tender – a supply contract which all potential suppliers may bid for under competitive condition

package – a negotiating term which refers to the final comprehensive agreement

patent – the legal right to use and sell an invention

payback period - the period of time over which revenues from a project will pay back the money invested in that project

press release - an announcement prepared by any organization for distribution to the press

quid pro quo - the concession that one side in a negotiation will make in return for a concession from the other side

quota restrictions - a limit, often in the form of maximum units, imposed by one country on the importation of goods from other countries

R&D - research and development

royalty - the income receivable from the ownership of a patent or licence assigned to another company

stake - a financial interest in a company or a property, e.g. a stake in a gold company

state of the art technology - the most up-to-date technology

strategic acquisitions – a policy of taking over key companies as part of a coordinated, long-term company plan

108