Income Money coming in; the total revenue or sales.

Income splitting A tax planning device frequently available to business owners where total tax paid by the company and the shareholders can be minimized. Splitting can refer to splitting between salaries and dividends, husband and wife salaries, etc.

Income statement A financial document that shows how much money (revenues) came in and how much money (expenses) was paid out. Subtracting the expenses from the revenues, gives the net profit; all three are shown on the income statement. Also called profit-and-loss statement.

Industry ratios Financial ratios established by many companies in an industry, in an attempt to establish a norm against which to measure and compare the effectiveness of a company’s management.

Innovation The use of a new idea, material or technology by an industry to change either the goods or services produced or the way in which the goods or services are produced or distributed.

Intangible asset Assets such as trade names or patent rights which are not physical objects or sums of money.

Intellectual property Knowledge and information which can be legally owned, as defined by laws governing copyright, trademarks, patents, royalty obligations, etc.

International competitiveness A term used to describe how competitive a country’s products or services sold abroad are in relation to other countries’ producers. Because of Canada’s small market of 36 million people, the ability to sell competitively abroad is especially important to many small businesses.

Invention The creation of a new technology or process, as opposed to its application.

Inventory A list of assets being held for sale or use. If you are in a retail business, the stock you have on the shelves is inventory, but then so are your available supplies, goods received or stored, and any expendable items on hand.

Inventory control The process of supervising inventory from the moment of purchase to the moment of sale. It includes knowledge of what goods are on hand, in what quantities, and at what cost.

Inventory turnover The number of times the value of inventory at cost (either based on an average level or at year end) divides into the cost of goods sold in a year. Both are a measure of your efficiency and effectiveness in selling your product.

Investment Pay-out of money for any purpose for which a profit is expected. One way to evaluate whether an investment in a business is worthwhile is to consider what you would receive on that same amount of money put into a low-risk investment, such as a bank account or Canada Savings Bonds.

Investment capital The money set aside for starting a business. Usually this would cover such costs as inventory, equipment, preopening expenses, and leasehold improvements.

ISP (Internet Service Provider) An organization or company that will provide you with an account with which you can dial into the Internet, or will provide you with a direct link to the Internet through a permanent connection.