MGMT 470 final

¡Supera tus tareas y exámenes ahora con Quizwiz!

The three general events that cause business risk

(1) events related to the property of the business, (2) events related to personnel, and (3) events related to customers and others

The two parts to a formal performance appraisal

(1) the performance review and (2) the pay review. These reviews should be held at different times of the year

Sole Proprietorship

A business owned by one person Unlimited personal liability where the proprietor has control. No government permission is required and there are few if any legal costs. Single taxation of income and raising capital is dependent on the assets and credit of the owner. Advantage: ease of setup. Disadvantage: the owner's personal responsibility. The owner's home, savings, and personal property could be used to pay damages.

Value

A customer's subjective assessment of benefits relative to costs in determining the worth of a product Most small businesses determine the value using some combination of the four common accounting methods of assigning asset value. Value items using these methods: acquisition cost, replacement cost, or fair market value.

Audit trail

A date and time-stamped, sequential record of the history and details around a financial transaction, work event, product development phase, or financial ledger entry. a path that allows a transaction to be traced through a data processing system from point of origin to output or backward from output to point of origin

Arbitration

A dispute resolution process held instead of court cases in which both sides present their case to a legal professional.

Growth trap

A financial crisis that is caused by a business growing faster than it can be financed.

Factoring

A financial transaction and a type of debtor finance in which a business sells its accounts receivable to a third party at a discount. Selling the rights to collect accounts receivable to an entity outside your business.

Litigation

A formal dispute resolution method that operates using the court system, typically with a lawyer representing each party

Patent

A grant by the U.S. government to an inventor for an idea that is new, useful, and nonobvious, giving the inventor the exclusive right to make, use, or sell his or her idea.

Elastic pricing

A price-sensitive market for a product or service; relatively small changes in price will generate fairly large changes in the quantity demanded price change has a big effect on supply or demand

Markup pricing

A price-setting method where an amount is added to the cost of a product to set the retail price and provide a profit.

Internal controls

A set of rules and procedures that work to limit the opportunity for employee theft or malfeasance.

Cash flow statement

A statement of the sources and uses of cash in a business for a specific period of time.

Balance sheet

A statement of what a business owns (assets), what it owes to others (liabilities), and how much value the owners have invested in it (equity).

Income statement

A statement that lists revenues and expenses and shows the amount of profit a business makes for a specified period of time

Economic Order Quantity (EOQ)

A statistical technique that determines the quantity of inventory that a business must hold to minimize total inventory cost.

Pull-through system

A term for just-in-time inventory systems in which product is ordered and placed into production only after a sale has been completed.

Separation of duties

A type of internal control that separates the physical control of an asset from the person accounting for that asset.

Hold harmless agreement

A type of waiver in which a party agrees not to hold another party responsible for certain events. : By agreeing to a hold harmless clause in a contract (also called a waiver), one party is agreeing not to hold the other responsible for his or her actions. In other words, one party is giving up legal rights to sue or otherwise enforce his or her rights.

Considerations for adding full-time employees

Adding employees increases the amount of work that can be done but also increases the demands on the owner. Think about the work to be done and carefully balance costs with increased productivity. • Finding the right employee fit is important, consider using a probationary period. • Taking care of employees includes understanding the many laws that apply to small businesses as your number of employees grows

Money, definition and 3 main purposes

An accepted medium of exchange To facilitate exchanges of unlike assets, such as your labor for a grocer's food. To measure the value of things, both tangible and intangible. To keep track of wealth.

Surety bonds

An agreement with an insurance or bonding company that will pay a specified amount in the event that the entity bonded fails to comply with specified contractual requirements

An e-tailer

An electronic retailer; a store that exists only on the Internet

External reference price

An estimation of what a price should be based on information external to a consumer, such as advice, advertisements, or comparison shopping.

Price gouging

Charging an outrageously high price for something.

Price skimming

Charging the absolute highest possible price due to inelastic demand.

Copyright

Exclusive right given to the creator of a literary or artistic work to make use of that work.

The main three types of accounting

Financial accounting is formal, rule-based accounting principles. Managerial accounting is intended for planning, directing, and controlling a business Tax accounting is based on governmental requirements.

Freight forwarders

Firms specializing in arranging international shipments— packaging, transportation, and paperwork. are specialists in export-related activities including tariff schedules, shipping, insurance, packing, transportation arrangements, customs clearing, and other export details. (By the way, many agents, export management companies, export trading companies, and freight forwarders are themselves small businesses. They know exactly what problems you've faced and are much easier to approach than some megacompany.)

Crowdfunding

Funding a business online through the collective involvement of others who provide donations, loans, or investments.

Long-term assets

Investments in a company that will benefit the company for many years. Can include fixed assets such as the company's property, plant, and equipment, but can also include intangible assets such as a company's trademark.

Pro forma financial statements

Latin for "in the form of" when used to describe financial statements; indicates estimated or hypothetical information. financial statements projecting future years' operations

Debt-to-equity ratio

Measures the extent to which the business can meet its obligations for the long haul Total Debt/Total Equity total liabilities/total equity total liabilities/stockholders equity

Commercial paper

Notes issued by creditworthy corporations.

The 3 main managerial accounting processes

One of the most valuable functions of managerial accounting is planning for future business activities. • This is done through standard budgeting or profit planning. • This method of organizing and formatting business planning is called pro forma financial statements.

Pull through inventory system

Prioritizes current demand. The supplier or manufactures goods in the quantity and timeframe needed, based on existing customer sales orders. ex) starbucks - cant start the coffee until an order is received.

Accounting analysis

Process to evaluate and adjust financial statements to better reflect economic reality A process in which detailed line items in a financial transaction or statement are carefully examined for a given account, often by a trained auditor or accountant.

Worker Adjustment and Retraining Notification (WARN) Act

Protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar day advance notification of plant closings and mass layoffs of employees. Requires 60 days advance notice prior to a plant shutdown or layoff of 50 or more employees

Psychological contracts

Refers to employees' beliefs about the promises between the employee and the firm. These beliefs are based on the perception that promises have been made (e.g., competitive wages, promotional opportunities, job training) in exchange for certain employee obligations such as giving of their energy, time, and technical skills. Owners often communicate conflicting terms when making these.

Prestige pricing

Setting a price above that of the competition to indicate your product is a status symbol.

Skimming

Setting a price at the highest level the market will bear, usually because there is no competition at the time. This technique is usually possible only if you are absolutely the first product or service of your type in the market, and only if it's something people really want.

Odd-even pricing

Setting a price that ends in the number 5, 7, or 9.

Partitioned pricing

Setting the price for a base item and then charging extra for each additional component.

Captive pricing

Setting the price for an item relatively low and then charging much higher prices for the expendables it uses

Exporting payment procedures

The easiest for you is to require up-front cash payment prior to shipment (or credit card if appropriate). This eliminates your risk, but puts the customer at risk. Providing credit to your customers reverses the risk, and puts it all on you. Both of these are possible methods of receiving payments, but less often used. More typical methods include letters of credit or documentary drafts.

The law of supply and demand in pricing

The economic theory that describes how the demand for products (or services) and the supply of them affect each other.

Weighted average cost of capital

The expected average future cost of funds

Perpetual inventory

The process of physically counting business assets on a set schedule

Micro-inventories

The purchase of inventory only after a sale is made; very typical with Internet firms.

Guerilla marketing

The use of creative and relatively inexpensive ways to reach your customer. Examples include doorknob hangers, flyers under windshield wipers, T-shirts, balloons, and messages written on sidewalks.

Bounded rationality model of management

Theories based on the assumption of limited human abilities are called bounded rationality models.

Empowerment zones

These are sometimes called empowerment zones or may be economic development zones. These zones, often in economically depressed areas, offer businesses lowcost space and tax advantages for locating there -An area where private enterprise (investment) is encouraged by reducing taxes and government regulations -The economically depressed urban areas that businesses, with the help of government grants, low-interest loans, and tax breaks, try to revive by creating jobs; also known as enterprise zones

Bundle of satisfactions

We've talked a bit about pricing in relation to your competition, but you can't just look at the competition's price ranges and pick something at, oh, about 75 percent of maximum. Just as yours is, your competitors' products are a "bundle of satisfactions." How do their product bundles match up to yours? You may make athletic shoes just as good as Nike's, but you don't provide the prestige of the Nike logo (at least not when you're new). What other "extras" do customers get from your competition—additional service, brand recognition, prestige, bragging rights, comfort of knowing a big company will back up the product, and others? These intangible things are hard to price, but you need to think about how

Fidelity bonds

also called dishonesty bonds, repay employers for losses caused by dishonest or negligent employees.

Accounts Receivable

are money that is owed to your business by your customers. who purchased your product on credit.

Short-term assets

assets that are held for less than one year

The three major sources of financing

debt, equity, and gifts.

Accounts Payable

e records to track what you owe and to make timely payments in order to capture prompt pay discounts and to maintain a good credit rating for your business. money owed by a company to its creditors.

Intermediaries

frequently small businesses themselves—provide the service of getting the product to the end consumer, including such functions as inventory control, advertising and promotion, delivery and warranty services, to name a few

Mediation

in which the dispute is put to a neutral third party who is not a judge.

Micro inventories

is a set of goods or services that consists of only one or a few items The purchase of inventory only after a sale is made; very typical with Internet firms

B-Corp certification

is a way to publicly inform potential investors that a for-profit firm is pursuing a social benefit role. A certification scheme for a for-profit company whose mission aligns with creating a better society and has met the sustainability standards developed by B Lab. Their rigorous standards address social and environmental performance, accountability, and transparency. Note that, some certified companies have legally organized themselves as "benefit corporations."

Joint ventures

is simply a formalized partnership between two or more businesses for some specific purpose. Joint ventures are quite common among medium to large businesses and are growing among small businesses when two or more companies join forces - sharing resources, risks, and profits, but not actually merging companies - to pursue specific opportunities

Accounts Payable

money owed by a company to its creditors. records to track what you owe and to make timely payments in order to capture prompt pay discounts and to maintain a good credit rating for your business

Accounts Receivables

money owed your business by customers—are often the key to survival

Key factors impacting a pricing decision

• Demand for the product or service. • Value delivered to the customer. • Prices set by competing firms. • Your business strategy and product placement.

The six factors most valuable to employees

• Teamwork.• Recognition.• Training.• Empowerment.• Contribution.• Communication.


Conjuntos de estudio relacionados

BUSINESS ACUMEN QUIZ ANSWERS + RATIONALE

View Set

Chapter 1: Mitigate Risk Review Questions

View Set

Ricci CH 48 (Pediatric diabetes)

View Set

OB - Chapter 11: Chapter 10 Ch 12, Ch. 17 & 18 Practice Questions

View Set