BA 101 (Homework)

Which four institutions are members of the U.S. banking system?

. Commercial banks . saving and loans . credit union . non-banks that offer financial services

Needs for operating funds include:

. Making capital expenditures . Acquiring needed inventory . Controlling credit operations

In factoring, the discount given depends on what?

. The age of the accounts receivable . The condition of the economy . The nature of the business

What are the three steps to financial planning?

1. Forecasting the firms short-term and long-term financial needs 2. Developing budgets to meet those needs 3. Establishing financial controls to see whether the company is achieving its goals

What are the three most common reasons a firm fails financially?

1. Undercapitalization (insufficient funds to start the business) 2. Poor control over cash flow 3. Inadequate expense control

Materials Requirement Planning (MRP)

A computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place.

Balance sheet

A financial statement that reports assets, liabilities, and owner's equity on a specific date.

Income Statement

A financial statement that shows a firm's bottom line- that is, its profit (or loss) after costs, expenses, and taxes

Reserve Requirement

A percentage of commercial banks checking and savings accounts they must keep in the bank.

Commercial Bank

A profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans.

Inancial Statement

A summary of all the financial transactions that have occurred over particular period.

3D printing is a production process also known as...

Additive manufacturing

What are the steps in the Accounting Cycle?

Analyze source documents, record transactions in journal, transfer, take a trial balance, prepare financial statements, analyze financial statements

Assets

Are economic resources (things of value) owned by a firm. Assets include productive, tangible items such as equipment, buildings, land, furniture, and motor vehicles that help generate income, as well as intangible items with value like patents, trademarks, copyrights, and goodwill.

Nonbanks

Are financial organizations that accept no deposits but offer many of the service provided by regular banks. Includes: . life insurance companies . pension funds . brokerage firms . commercial and consumer finance companies

Credit Union

Are non-profit, member-owned financial cooperatives that offer the full variety of banking services to their members-interest-bearing checking accounts at relatively high rates, short-term loans at relatively low rates, financial counseling, life insurance policies, and a limited number of home mortgage loans.

What is the fundamental accounting equation?

Assets= Liabilities+ Owners' equity

secured loan

Backed by collateral, something valuable such as property.

The check clearing role of the federal reserve allows ______

Banks to settle the check payments between banks in different parts of the country.

Which are considered to be nonbank financial institutions?

Brokerage firms pension funds insurance companies

Ratio Analysis

Calculating and interpreting financial ratios developed from the firm's financial statement

The federal reserve banks serve as the national _________ for checks

Clearinghouses

Financial management is the heart beat of what? and what keeps the heartbeat stable

Competitive business, Accounting information

Open Market

Consists of the buying and selling of government bonds.

operating expenses

Costs involved in operating a business, such as rent, utilities, and salaries.

During tough economic times, customers are happy when firms extend_________ for purchases

Credit

What's the correct order in the production process?

Inputs, production, controls, outputs

Reaching Beyond Our Borders...

Is a box that looks at how American Manufacturer Tesla has experienced multiple problems in its attempt to build an auto plant in Germany.

Finance

Is the function of business that acquires funds for the firm and manages them within the firm.

Less manufacturing uses...

Less time and less resources.

What are four main types of financial ratios used in ratio analysis?

Liquidity ratio, debt ratio, profitability ratio, and activity ratios

Capital expenditures

Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights.

Which sector has lost more jobs due to technological changes?

Manufacturing

The_____sector has lost more jobs due to technological changes than the _____sector

Manufacturing, Services

Liquidity Ratio

Measures a company's ability to turn assets into cash to pay its short-term debts (must be repaid within one year)

Cost of goods sold

Measures the cost of merchandise the firm sells or the cost of raw materials and supplies it used in producing items for resale.

Operation Managers

Must ensure products are manufactured and delivered on time, on budget, and ti specifications.

Managerial Accounting

Provides information and analysis to managers inside the organization to assist them in decision making.

Leverage

Raising funds through borrowing to increase the firm's rate of return.

Auditing

Reviewing and evaluating the information used to prepare a company's financial statements.

Budget

Sets forth management's expectations for revenues and allocates the use of specific resources throughout the firm.

Setting the reserve requirements, setting the discount rate, and collection data on the money supply are all the activities of _______?

The Federal Reserve

Discount Rate

The interest rate the Fed charges for loans to member banks.

Financial management

The job of managing a firm's resources to meet goals and objectives.

Revenue

The monetary value of what a firm received for goods sold, services rendered and other payments (such as rents received, money paid to the firm for use of its patents, interest earned, etc.)

True or false: Computers are used to design products when CAD is employed

True

savings and loan association

a financial institution that traditionally specialized in savings accounts and mortgage loans but now offers many of the same services as commercial banks

Financial Control

a process in which a firm periodically compares its actual revenues, costs, and expenses with its budget

Operation Management

a specialized area in management that converts or transforms resources, Including Human Resources like technical skills and innovation, into goods and services.

Annual report

a yearly statement of the financial conditions, progress, and expectations of an organization

Debt Financing

borrowing money the company has a legal obligation to repay; firms can borrow by either getting a loan from a lending institution or issuing bonds

interfirm process

companies work closely together to design, produce, and ship products to customers

Quality

consistently producing what the customer wants while reducing errors before and after delivery to the customer

Liabilities

debts that you owe

flexible manufacturing

designing machines to do multiple tasks so that they can produce a variety of products

A type of problem that operations management planning helps to solve as it relates to manufacturing is:

facility layout

True or false: ISO is a governmental body

false

Short-term forecast

forecast that predicts revenues, costs, and expenses for a period of one year or less

Financial Accounting

generates financial information and analyses for people primarily outside the organization

Information Technology (IT)

gives firms and employees increased flexibility to choose locations while staying in the competitive mainstream.

Operations management in the service industry...

is all about creating a good experience for those who use the service.

The Just-in-time inventory method...

is designed to keep a minimum of parts, supplies, and other materials on hand just in time to go on the assemble line.

Production

is the creation of finished goods and services using the factors of production: Land, labor, capital, entrepreneurship, and knowledge.

When considering ______-______ financing options a financial manager must consider the organization's financial goals and objectives

long-term

Leverage ratio

measure the degree to which a firm relies on borrowed funds in operation

electronic funds transfer system (EFT)

messages about a transaction are sent from one computer to another

Accounting

planning, recording, analyzing, and interpreting financial information

Statement of cash flow

reports cash receipts and cash disbursements related to the three major activities of a firm: . Operations . Investments . Financing

Commercial paper

short-term unsecured debt issued by large corporations

activity ratio

tells us how effectively management is turning over inventory

Overall company quality is outlined by the standards set by...

the Malcolm Blaldrige National Quality Award.

Cash flow

the difference between cash coming in and cash going out of business.

Purchasing

the function in a firm that searches for high-quality material resources, finds the best suppliers, and negotiates the best price for goods and services

Federal Deposit Insurance Corporation (FDIC)

the government agency that insures customer deposits if a bank fails

facility layout

the physical arrangement of resources (including people)to most efficiently produce goods and provide services for customers.

Trade credit

the practice of buying goods and services now and paying for them later. It is the most widely used resource of short-term funding, the least expensive, and the most convenient.

facility location

the process of selecting a geographic location for a company's operations

Factoring

the process of selling accounts receivable for cash

lean manufacturing

the production of goods using less of everything compared to mass production