Equity Financing
Definition
Raising money by selling ownership stakes in a business rather than borrowing. It brings no repayment obligation but dilutes existing owners and shares future profits.
Related Terms in Business Terms
Debt Financing
Raising money by borrowing, to be repaid with interest. It preserves ownership but adds fixed repayment obligations and financial risk if cash flow tightens.
Break-Even Analysis
Calculating the sales level at which total revenue equals total costs, so the business neither profits nor loses. It shows how much must be sold to cover fixed and variable costs.
Gross Receipts
The total amounts a business receives from all sources before subtracting any costs or deductions. Several tax and registration thresholds are measured against gross receipts.
Turnover
The total sales or revenue a business generates over a period. In accounting it can also refer to how quickly assets such as inventory or receivables are used and replaced.
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