Glossary

Generally accepted accounting principles (GAAP) are a common set of accounting principles, standards and procedures that companies must follow when they compile their financial statements. GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information.

Going concern is an accounting term for a company that has the resources needed to continue to operate indefinitely until a company provides evidence to the contrary, and this term also refers to a company's ability to make enough money to stay afloat or avoid bankruptcy.

Any offer to sell to the public or a sale to the public of goods, wares, or merchandise on the implied or direct representation that such sale is in anticipation of the termination of a business at its present location or that the sale is being held other than in the ordinary course of business.

Goodwill is an intangible asset that arises as a result of the acquisition of one company by another for a premium value. The value of a company’s brand name, solid customer base, good customer relations, good employee relations and any patents or proprietary technology represent goodwill.

Accounts Receivable due from the Government.  The ability to perfect and collect on these accounts varies based on the type of government entity (local, state or federal government entity); for Federal A/R the ability to obtain an Assignment of Claims is often a requirement to eligibility.

Pricing for funded amounts that varies based on the Borrower's performance. For ABL transactions the grid can be based on their percentage of facility usage, leverage, FCCR, EBITDA or excess availability levels.

Gross margin is a company's total sales revenue minus its cost of goods sold, or COGS, divided by the total sales revenue, expressed as a percentage. The gross margin represents the percent of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services sold by a company.

Gross profit is a company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.