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GLOSSARY
ENTREPRENEURSHIP DEVELOPMENT
Achievement Motivation: One’s drive to overcome challenges and obstacles to achieve
the set goal.

Ancillary Unit: An industrial unit which sells not less than 50% of its manufactures to one
or more industrial units.

Bill of Lading: A statement, by which a transporter acknowledges receipt of goods to be

transported, indentifies the goods and sets forth a contract of carriage of the goods.

Branding: The method of differentiating the products into brands to make them different
from other similar products offered by a given organization or its competitors.

Break-Even Analysis: A Mathematical procedure for studying the relationships between

cost, sales, volume and profits.

Break-Even Point: The points at which the organization’s total costs and total revenue are
equal i.e. a position of neither profit nor loss.

Business: An activity involving buying and selling goods, manufacturing goods or

providing services in order to earn profits.

Business Environment: The composite social, economic, market, political, technological

and other conditions external to any given business enterprise that are likely to have a
bearing on the overall efficiency and effectiveness of its operations.

Business Philosophy: A business owner’s written or unwritten principle or beliefs that

guide him or her in business decision making and day-to-day business operations.

Business Plan: A visualization of a business enterprise before operations are started. It is

also called ‘Project Report’.

Change Agents: People, whose roles are to stimulate, facilitate and coordinate change
within a system while remaining independent of it.

Company: A company is an artificial person created by law. It is distinct from the

members who constitute it. Investors have limited liability.

Competence: The ability to perform a particular activity to a prescribed standard. The

ability to perform in the work place to the standard required in employment.

Competition: A market situation that exists when there are a large number of independent
individuals or business undertakings producing or supplying similar products.

CPM: A technique of scheduling time for each activity of the project.

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Customer: A person who demands for the products or services offered by the marketer or
supplier.

Cyberspace: Range of information sources available through computer networks.

Digital Delivery: The delivery or despatch of nettish or digital product, software and
information online to the customers. This term is used for goods, which do not have a
physical form.

Digital Signature: Data sent with an encrypted message to identify and verify that the
message has not been altered after sending.

Distinctive Competency: An unusual feature, service, product characteristic, or image

enjoyed by a business venture to set it apart from its competitors.

Diversification: The process of expanding product lines, services or markets to include

new customer groups or new products or services for existing customers.

Drone Entrepreneur: That Entrepreneur who is never ready to introduce changes in his
enterprise.

Economic Development: An increase in real per capita income of people resulting in

improvement in their levels of living.

Electronic Commerce: The conducting of commercial activities such as production,

distribution, marketing, sale or delivery of goods and services by electronic means.

Electronic Data Interchange (EDI): It provides electronic formats that allow for an
exchange of business data between trading partners.

Entrepreneur: A person, who creates some new venture, organizes factors of production,
undertakes risk and handles economic uncertainty involved in new enterprise/venture.

Entrepreneurship: A set of attributes that an entrepreneur possesses and practices to

establish and run the enterprise.

Export-Processing Zone (EPZ): A physically fenced industrial estate developed by host

country government to facilitate manufacture by foreign as well as domestic investors,
primarily for exports.

External Environment: The environment outside the enterprise (such as government,

political, social, economic, cultural factors, etc.)

Fabian Entrepreneur: The entrepreneurs who experiment changes in their enterprises

only when these are must to experiment.

Factoring: Selling accounts receivables or inventory to obtain cash. Factors deals result in
deep discounting of the face value of assets.

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Feasibility Plan: An initial written plan comprising all the elements of a good business
plan.

Financial Planning: A forecast made for requirement of finance for the enterprise at the
beginning itself. Subsequently it could be annual financial planning or quarterly etc.
depending upon the firms need.

Imitative Entrepreneur: Entrepreneur who adopts innovations of earlier entrepreneurs.

Innovation: The transformation of creative ideas into useful applications by combining

resources in new or usual ways to provide value to society for new or improved products,
technology or services.

Intrapreneur: A person who pursues an innovation from within the security of his or her
organizational position. He/ She is also termed “intra- corporate entrepreneur”.

Invention: The creation of new products, processes and technologies not previously known
to exist.

Kaizen: A Japanese term implying continuous improvement, involving every employee

function at all levels of an organization.

Letter of Credit: An instrument issued by the buyer’s bank, authorizing the seller to draw
in accordance with certain terms and stipulating in a legal form that a bill will be honoured.

Non- Governmental Organization: In the field of development, an NGO refers to a

Non- Governmental Organization which is not a government agency. A nursing home or
company or a religious body or a charitable society registered under Societies Act, 1962
may be an NGO.

PERT: A technique of scheduling the sequence of activities to be completed in order to

accomplish the project within a short period of time.

Project Appraisal: A technique of making costs and benefits analysis of different aspects
of the proposed project with an objective to adjudge its viability.

Prototype: A working model of an innovation used to test or demonstrate its practical

capabilities.

Quality Circle: Periodic meeting of labor and management personnel to solve quality
control and productivity problems.

Quality Control: The process of ensuring that goods and services meet predetermined
standards.

Return on Investment (ROI): A form of expressing profitability by dividing net income

by investment.

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Risk: The condition of not knowing outcome of an activity or decision. Nevertheless, risk
is capable of being evaluated for relative probabilities.

Rural Entrepreneurship: The enterprising attitude developing among the people in rural
areas.

Seed Money: Money invested in a new venture prior to or during, start-up underwrite
operations, assets or business development.

Sick Industry: An industry which has at the end of any financial year accumulated losses
equal to or exceeding its entire net worth and has also suffered from cash losses in such
financial year immediately preceding such financial year.

Sick Small- Scale Industry: A small- scale unit when (i) any of its borrowal accounts has
become a doubtful advance i.e. principle or interest in respect of any of its loan accounts
has remained overdue for a period exceeding 2 and ½ years and (ii) there is erosion in the
net worth due to accumulated cash losses to the extent of 50 percent or more of its peak net
worth during the preceding two accounting years.

Small Scale Industry: An industry with investment limit up to Rs. 1 crore in plant and
machinery.

Social Responsibility: An obligation for business owners to consider and minimize the
negative impacts of their decisions and operations on customers and society at large.

Sub- Contracting: A relationship that exists when a company called a ‘contractor’ places
an order with another company called the ‘sub-contractee’ for the production of parts,
components, sub-assembles or assemblies to be incorporated into a product sold by the
contractor. This is known an ‘ancillarisation’ in India.

Target Market: A group of customers for whom a business undertaking creates and
maintains a marketing mix that is consistent with specific needs and preferences of the
customers in the group.

Total Quality Management (TQM): This is cost effective system for integrating the
continuous quality improvement efforts of people at all levels in an organization to deliver
products and services which ensure customer satisfaction.

Trade Credit: A form of credit extended by whole sellers to retailers, it involves the
financing of goods or services meant for resale. It is also called “mercantile credit”

Venture Capital: Money obtained through private investment or public investment funds
directed to high-risk and high-return enterprises. It can be for commercially viable new
units.

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Women Entrepreneur: Those women, who think of a business enterprise, initiate it,
organize and combine factors of production, operate the enterprise and undertake risks and
handle uncertainty involved in running an enterprise.

Working Capital: Funds that a business keeps on hand to use in buying materials, office
supplies and fixtures and other items and services required in the day-to-day running of a
business undertaking.

Zero-Based Budgeting (ZBB): A budgeting approach in which all the organization’s

activities, the existing ones and the proposed new ones, are considered on an equal footing
in resource allocation decisions, rather than using the previous year’s budget as a starting
point.

Zero- Defect Product: A defect- free product used as a target by the manufacturing
enterprises in quality practices.

GLOSSARY
MUTUAL FUNDS
Mutual Fund: A mutual fund is nothing more than a collection of stocks and/or bonds.
One can think of a mutual fund as a company that brings together a group of people and
invests their money in stocks, bonds, and other securities. Each investor owns shares,
which represent a portion of the holdings of the fund.

Sponsor: Promoter of mutual fund is called as sponsor. Sponsor should contribute at least
40% of asset Management Company. 100 crore is required to act as AMC
Trustee: Trustee holds the assets on behalf of the sponsor. Trustees are the care taker of
the unit shareholders money.
Custodian: The custodian maintains the custody of securities in which scheme invests and
keeps the record of the investments as register in the share trading.
Transfer Agents: Registrar and Transfer Agents (RTAs) maintain the investor’s (unit
holder’s) records, reducing the burden on the AMCs.

AMC: They are the real investment mangers and collect the amounts and may introduce
new schemes and the aim of the fund manager is more returns for the investors.

Entry load: An entry load is the charge that the fund charges you for marketing and
distributing the fund. This money is typically paid through your mutual fund broker.

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Exit loads: Exit loads are loads that the mutual fund charges when an investor leaves the
fund. Exit loads are charged by some funds on a reducing basis on time: hence the load
decreases as time passes. This promotes a long term investment from the investor. Also, the
fund may charge an exit load to recover some of the charges.

NAV: Most commonly used in reference to mutual or closed-end funds, net asset value
(NAV) measures the value of a fund's assets, minus its liabilities. NAV is typically
calculated on a per-share basis.

Systematic Investment Plan: A specific amount should be invested for a continuous

period at regular intervals under this plan.

Systematic Withdrawal Plan (SWP): As opposed to the Systematic Investment Plan, the
Systematic Withdrawal Plan allows the investor the facility to withdraw a pre-determined
amount / units from his fund at a pre-determined interval. The investor's units will be
redeemed at the applicable NAV as on that day.

Cum-Dividend or CD: The buyer of a CD share is eligible to receive the dividend for the
preceding year. The eligibility lapses once the company declares the share XD, or without
dividend.

Ex-Dividend: A classification of trading shares when a declared dividend belongs to the

seller rather than the buyer. A stock will be given ex-dividend status if a person has been
confirmed by the company to receive the dividend payment.

Dividend distributions: Dividend distributions represent income-primarily from the

interest and dividends earned by the securities in a fund's portfolio-after expenses is paid by
the fund.

No Load Mutual Fund: A kind of Mutual funds that does not need any kind of fees and
commissions while buying or redeeming any kind of shares in the Mutual Funds.

Dividend reinvestment plan: A dividend reinvestment program or dividend reinvestment

plan (DRIP) is an equity investment option offered directly from the underlying company.
The investor does not receive quarterly dividends directly as cash; instead, the investor's
dividends are directly reinvested in the underlying equity. (The investor must still pay tax
annually on his or her dividend income, whether it is received or reinvested.)

Open-End Fund: A type of mutual fund that does not have restrictions on the amount of
shares the fund will issue. If demand is high enough, the fund will continue to issue shares
no matter how many investors there are. Open-end funds also buy back shares when
investors wish to sell.

Closed-End Fund: A closed-end fund is a publicly traded investment company that raises
a fixed amount of capital through an initial public offering (IPO). The fund is
then structured, listed and traded like a stock on a stock exchange.

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Equity Fund: A mutual fund that invests principally in stocks. It can be actively or
passively (index fund) managed. Also known as a "stock fund".

Debt Fund: A debt fund may invest in short-term or long-term bonds, securitized products,
money market instruments or floating rate debt. The fee ratios on debt funds are lower, on
average, than equity funds because the overall management costs are lower.

Money market funds: An investment fund that carry the purpose of earning interest for
shareholders. Some suppliers of money market funds are brokerage firms, mutual funds,
banks, etc.

Theme fund: An investment company that chooses investments according to a particular

issue or theme. For example, a fund built on an agricultural theme might invest in the
equities of farm equipment manufacturers, chemical companies, and other firms that sell
agricultural products.

Exchange-Traded Fund - ETF: A security that tracks an index, a commodity or a basket

of assets like an index fund, but trades like a stock on an exchange. ETFs experience price
changes throughout the day as they are bought and sold.

Fund of Funds: Fund of Funds is a kind of investment fund which normally uses a
particular strategy to hold a portfolio of several other investment funds instead of directly
investing in various kinds of bonds, shares and different kind of other securities.

Commodity Funds: These funds are true commodity funds in that they have direct
holdings in commodities. For example, a gold fund that holds gold bullion would be a true
commodity fund.

Balanced Fund: As the name suggest they, are a mix of both equity and debt funds. They
invest in both equities and fixed income securities, which are in line with pre-defined
investment objective of the scheme. These schemes aim to provide investors with the best
of both the worlds. Equity part provides growth and the debt part provides stability in
returns.

Real asset funds: These funds invest in physical assets such as gold, platinum, silver, oil,
commodities and real estate. Gold Exchange Traded Funds (ETFs) and Real Estate
Investment Trusts (REITs) fall within the category of real asset funds.

Sector Funds: These funds are expected to invest predominantly in a specific sector. For
instance, a banking fund will invest only in banking stocks. Generally, such funds invest
65% of their total assets in a respective sector.

Index Funds: These funds seek to have a position which replicates the index, say BSE
Sensex or NSE Nifty. They maintain an investment portfolio that replicates the
composition of the chosen index, thus following a passive style of investing.

Offshore Funds: These funds mobilize money from investors for the purpose of
investment outside their home country.

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Sharpe Ratio (SR): SR is a measure developed to calculate risk-adjusted returns. It

measures how much return you can expect over and above a certain risk-free rate (for
example, the bank deposit rate), for every unit of risk (i.e. Standard Deviation) of the
scheme.

Credit Risk: The possibility that a bond issuer will fail to repay interest and principal in a
timely manner. Also called default risk.

Market Risk: The possibility that stock fund or bond fund prices overall will decline over
short or even extended periods. Stock and bond markets tend to move in cycles, with
periods when prices rise and other periods when prices fall.

Large Cap: Primarily invests in "Blue-chip" companies - large, well-known industrials,

utilities, technology, and financial services companies with large market capitalization.
Large cap stocks are perceived to be less risky than smaller capitalized companies.

Mid Cap: Primarily invests in companies whose market capitalization is smaller than large
caps but larger than small caps. Mid caps are generally considered more risky than large
cap stocks but have a higher return expectation.

Small Cap: Primarily invests in emerging companies, thought to have potential for future
growth and profit. Small caps are generally considered the riskiest stocks compared to
larger capitalized firms but carry the expectation of higher returns. Small cap funds are
subject to greater volatility than those in other asset categories.

Treynor Ratio: The Treynor Ratio is a mutual fund's excess return divided by its beta,
where excess return is the actual return less the risk-free rate of return. The Treynor Ratio
is a measure of excess return per unit of systematic risk.

Sortino ratio: The Sortino ratio measures the risk-adjusted return of an investment asset,
portfolio or strategy. It is a modification of the Sharpe ratio but penalizes only those returns
falling below a user-specified target, or required rate of return, while the Sharpe ratio
penalizes both upside and downside volatility equally. It is thus a measure of risk-adjusted
returns that treats risk more realistically than the Sharpe ratio.

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