Business Encyclopedia C-Words

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Capital is the money and assets that a business uses to operate, grow, and make investments. This can include cash, equipment, buildings, and any resources that help a business function. Capital is crucial for starting and running a business, as it’s used to pay for expenses, hire employees, purchase supplies, and expand operations. It’s the financial foundation of a business.

Capital Gain/Loss

A capital gain is the profit you make when you sell an asset, like stocks, real estate, or investments, for a higher price than what you originally paid for it. This gain is calculated by subtracting the purchase price (also known as the “cost basis”) from the selling price. Capital gains are typically subject to taxation, but the rate and rules can vary by country and the specific type of asset.

Conversely, a capital loss occurs when you sell an asset for less than you paid for it. This results in a decrease in the value of your investment. Capital losses can sometimes be used to offset capital gains for tax purposes, reducing the overall tax liability. It’s important to keep records of capital gains and losses for tax reporting.

Cash Float Accounts

A “Cash Float Account” refers to a bank account specifically used to manage and track the cash transactions within a business. It’s typically used to maintain a certain amount of money on hand to facilitate daily or routine operational expenses, like covering small, immediate expenses. The purpose of a cash float account is to ensure that a business always has enough cash available for these kinds of transactions, making it more convenient to conduct daily business operations. This account is separate from the main business account and is usually maintained at a fixed, relatively small balance.

Cash Flow:

Cash flow refers to the movement of money in and out of a business. It’s a measure of how much money a company receives (inflows) and spends (outflows) during a specific period, usually a month or a year. Positive cash flow means a business is receiving more money than it’s spending, which is typically a good sign. Negative cash flow indicates that a business is spending more than it’s earning, which can be a cause for concern. Managing cash flow is crucial for a business’s financial stability and growth.

Cash Flow Statement

A Cash Flow Statement is a financial document that shows how money flows in and out of a business over a specific period of time, usually a month, quarter, or year. It is split into three main sections:

1. Operating Activities: This part tracks the cash generated or used in the daily operations of the business, like selling products or providing services.

2. Investing Activities: This section records cash related to buying or selling assets, such as equipment, land, or investments.

3. Financing Activities: It accounts for cash transactions involving loans, repayments, or investments made by owners.

The Cash Flow Statement helps business owners understand how their company manages cash, which is crucial for making financial decisions and ensuring the business stays financially healthy.

Cash-Basis Accounting

Cash-basis Accounting is a simple way of keeping track of a business’s finances. In this method, transactions are recorded only when money actually changes hands. Here’s how it works:

Revenue: Income is recorded when the cash is received. For example, if a customer pays for a product or service, the income is recognized at that moment.

Expenses: Costs are recorded when they are paid. For instance, if the business buys supplies and pays for them immediately, the expense is recorded right away.

Cash-basis accounting is easy to understand and use, making it a popular choice for small businesses. However, it may not provide a complete picture of a business’s financial health over time because it doesn’t account for money owed or money to be received in the future. As a result, it may not be suitable for larger or more complex businesses.

Cash Management

Cash Management is the process of overseeing and controlling the money that flows in and out of a business. It involves monitoring how much cash a company has on hand, ensuring that there’s enough to cover expenses, and investing surplus funds to generate a return. Effective cash management is essential for ensuring a business can meet its financial obligations and make smart decisions about using its available funds. It often includes activities like cash budgeting, cash flow analysis, and optimizing the timing of payments and receipts.


Collateral is something valuable that a person or business provides as security when they borrow money from a bank or lender. If they can’t repay the loan, the lender can take the collateral to cover the debt. Common examples of collateral include real estate (like a house), vehicles, or valuable assets. It’s a way to give the lender confidence that they’ll get their money back.


Compensation is the payment or rewards that employees receive from their employer in exchange for their work or services. This can include various forms, such as wages, salaries, bonuses, benefits like health insurance, and other perks. Compensation is an essential part of an employment agreement, and it’s how employees are financially rewarded for their job performance and contribution to the company.

Competitive Analysis

Competitive analysis is the process of examining and evaluating the strengths and weaknesses of your business in comparison to other businesses in the same industry or market. It helps you understand how your products or services measure up against your competitors, identify opportunities for improvement, and develop strategies to gain a competitive advantage. This analysis involves studying your rivals’ pricing, marketing tactics, customer base, and overall business performance to make informed decisions that can help your business thrive in a competitive environment.

Compound Interest:

Compound interest is a way to calculate the growth of money or investments over time. It’s the interest that is earned not only on the initial sum of money (the principal) but also on any interest that has already been earned. In simple terms, it’s interest on interest.

Here’s how it works: Let’s say you have some money in a savings account. The bank pays you interest on the initial amount you deposited, and then in the next period, it pays you interest on both the initial amount and the interest you’ve already earned. This process continues, and your money grows faster over time compared to simple interest, where you earn interest only on the initial principal.

Compound interest can be a powerful tool for saving and investing because it allows your money to grow more quickly, especially over longer periods. It’s commonly used in savings accounts, loans, and investments to determine how your money will grow or how much you’ll owe over time.


Consultants are individuals or firms hired to provide expert advice and assistance on specific business problems or challenges. They have a deep understanding of a particular field or industry and offer their knowledge to help companies make better decisions or solve complex issues. Consultants may work in various areas, such as management, finance, marketing, or technology, and they usually work on a temporary basis, providing recommendations and strategies to improve a company’s performance or address specific needs.

Consumer Advocacy

Consumer Advocacy is the practice of protecting and promoting the rights and interests of consumers in the marketplace. It involves individuals or organizations working on behalf of consumers to ensure fair and ethical business practices. This can include things like addressing product quality, safety concerns, fair pricing, and advocating for consumer rights and protections.


Contracts are legally binding agreements between two or more parties. These agreements outline the terms and conditions that all parties involved must follow. In a business context, contracts are essential for formalizing arrangements, defining the rights and obligations of each party, and ensuring that all parties understand their roles and responsibilities.

Key elements of a contract typically include:

1. Parties: The names and roles of all individuals or organizations involved in the agreement.

2. Offer and Acceptance: One party makes an offer, and the other party accepts it, forming the basis of the contract.

3. Consideration: This refers to what each party will give or receive as part of the agreement, often involving goods, services, or money.

4. Terms and Conditions: The specific rules, requirements, and obligations that the parties must follow.

5. Duration: The period during which the contract is valid.

6. Termination: The conditions under which the contract can be ended.

Contracts are crucial for establishing trust, defining expectations, and resolving disputes if they arise. It’s important to have a clear, written contract for any significant business transaction to protect the interests of all parties involved.


Copyright is a legal protection that gives the creator of an original work, such as a book, music, art, or software, the exclusive right to control how that work is used and distributed. In Ghana, it’s governed by the Copyright Act 2005 (Act 690), which grants creators the right to reproduce, distribute, and publicly display their work. This helps creators earn money from their creations and encourages them to continue making new and innovative things. Others can’t use or copy the work without the creator’s permission, except under certain conditions like fair use, which allows for limited use without permission for purposes like education and criticism. Copyright usually lasts for the creator’s lifetime plus 70 years in Ghana.

Corporate culture

Corporate culture refers to the shared values, beliefs, attitudes, and behaviours that characterize an organization or company. It’s like the personality of the company. Corporate culture influences how employees interact with each other, how they approach their work, and how they engage with customers and the broader community.

In Ghana, corporate culture may be influenced by the country’s cultural values and business traditions. A strong corporate culture can help create a positive and productive work environment, while a weak or negative culture can lead to issues such as low employee morale or unethical behaviour. It’s important for businesses in Ghana to cultivate a culture that aligns with their values and goals to foster a healthy and thriving workplace.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) is a concept in business ethics and management that involves a company’s commitment to operate in a way that not only maximizes profits but also considers its impact on society and the environment.

In simpler terms, CSR means that a company goes beyond its primary goal of making money and takes active steps to contribute positively to the well-being of its employees, the community, and the environment. This can include initiatives such as supporting local charities, reducing the company’s carbon footprint, promoting fair labor practices, or engaging in philanthropic activities. CSR is a way for businesses to show their commitment to being good corporate citizens and to address social and environmental issues while running a profitable operation.


Costs, in the context of business, refer to the expenses incurred in the process of producing goods, providing services, or running operations. These expenses can include various items, such as labour, materials, rent, utilities, taxes, and other expenditures necessary for the day-to-day functioning of a business. Costs are a fundamental aspect of business accounting and management, and they can be categorized into fixed costs (which remain relatively constant) and variable costs (which change with production or sales levels). Understanding and effectively managing costs is crucial for businesses to remain profitable and sustainable.


A company is an incorporated entity that is distinct from the individuals who establish it and is managed by directors. In Ghana, there are four primary types of companies: companies limited by shares, companies limited by guarantee, unlimited companies, and external companies. These companies can further be classified as either private or public companies.

Company Limited by Guarantee: This type of company is established for non-profit, social, or charitable purposes and is not authorized to create or issue shares. The personal liability of the members of a company limited by guarantee is restricted to the amount each member commits to contribute to the company’s assets if it needs to be dissolved.

Unlimited Company: An unlimited company is a for-profit business where shareholders have unrestricted personal liability. This means that shareholders are personally responsible for the company’s debts, and there is no limit to their liability.

Private Company Limited by Shares: A private company limited by shares can have a maximum of 50 members and imposes constraints on shareholders’ ability to transfer their shares. It is also not allowed to make public invitations to acquire shares or deposit money from the public.

Public Company Limited by Shares: A public company limited by shares can have an unlimited number of members and does not restrict the transfer of shares among shareholders. Public companies limited by shares are permitted to make public offers for shares and accept deposits from the public.

External Company: An external company is a foreign business entity with a registered place of business in Ghana. This could include a branch, management or registration office, or a factory. It allows foreign companies to establish a presence in Ghana and operate legally within the country.

These distinctions help businesses in Ghana determine their legal structure, purpose, and liability, ensuring they operate within the framework of Ghanaian business laws and regulations.

Cost-Benefit Analysis

Cost-Benefit Analysis (CBA) is a method used by businesses and organizations to evaluate whether a particular project or decision is worth pursuing. It involves comparing the costs (money, time, resources) associated with a project to the expected benefits (usually in financial terms) that the project is likely to generate. The goal is to determine if the benefits outweigh the costs. If the benefits are greater, it suggests that the project is a good investment; if the costs are higher, it may not be a wise decision to proceed with the project. CBA helps in making informed choices and ensuring resources are used efficiently.


Coupons are vouchers or codes that offer discounts or special deals on products or services. They are typically provided by retailers, manufacturers, or service providers to encourage customers to make a purchase or use their services. Coupons can come in various forms, such as paper cut-outs, digital codes, or printable online vouchers. When a customer presents a coupon during a transaction, they receive a price reduction or some other form of incentive, like a free item or a discount on their purchase. Coupons are a popular way to save money and attract customers in the retail and service industries.


Credit refers to the ability to borrow money or access goods and services with the promise to repay the borrowed amount or cover the cost in the future. It’s essentially a trust-based system where a lender or service provider allows you to use their resources with the expectation that you will pay them back, often with interest or fees. Credit can take various forms, such as loans, credit cards, or store credit, and it’s a crucial aspect of personal and business finance. Building and managing credit responsibly is important for financial stability.

Customer retention

Customer retention is the practice of maintaining and nurturing a positive, ongoing relationship with existing customers to encourage them to continue doing business with a company. It involves strategies and efforts aimed at keeping customers satisfied, engaged, and loyal. This is often more cost-effective than constantly acquiring new customers.

Customer retention strategies can include providing excellent customer service, offering loyalty programs, ensuring product or service quality, and seeking feedback to improve the customer experience. Businesses invest in customer retention to increase customer lifetime value, boost revenue, and create a strong, loyal customer base.

Customer Service

Customer Service refers to the assistance and support provided to customers by a business or organization. It involves all the interactions and activities aimed at helping customers before, during, and after they make a purchase or use a service. 

Good customer service focuses on meeting the needs and expectations of customers, ensuring their satisfaction. This can include answering questions, resolving issues or complaints, providing information, and being friendly and responsive. Effective customer service is essential for building positive relationships with customers, gaining their loyalty, and promoting a positive reputation for the business.

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