MGT 321 Final Exam

LEED

"Leadership in Energy and Environment Design"; international rating system for "green" buildings used by the United States Green Building Council

Four C's of Borrowing

1. Character of the managers of the business. 2. Capacity of the business to repay both principal and interest on time. 3. Conditions of the industry and economy in which the business operates. 4. Collateral that can be used to secure the loan.

Statement of Cash Flow: three parts

1. Operating activities - include the production sales and delivery of the company's product as well as collecting payment from its customers. This could include purchasing raw materials, building inventory, advertising, and shipping the product. 2. Investing activities - Purchase or Sale of an asset (assets can be land, building, equip, etc) OR loans made to suppliers etc 3. Financing activities - include the inflow of cash from investors such as banks and shareholders as well as the outflow of cash to shareholders as dividends as the company generates income

2 Types of Financial Goals

1. Wealth- the value of the business if sold 2. Income- cash that is available from the business to pay the entrepreneur's salary

SBA Guaranteed Loan Program Requirements

1. business must be majority-owned (51%+) by individuals 2. individuals must be an American citizen, by birth or naturalization 3. business must be majority-owned and controlled/managed by socially and economically disadvantaged individuals 4. individuals controlling and managing the firm on a full-time basis must meet the SBA requirement for disadvantage, by proving both social disadvantage and economic disadvantage 5. must be a small business 6. must demonstrate potential for success 7. principals must show good character 8. separate eligibility requirements exist for a business owned by American Indians, Native Alaskans, Native Hawaiians or Certified Development Companies

Three common mistakes in unreliable and inaccurate revenue forecasts

1. linear forecast model 2.hockey stick forecast 3. 20/80 vs. 80/20

Partnership

2 or more people cooperating to conduct a business enterprise

Tax Abatement

A reduction in the level of taxation faced by an individual or company.

Internal Control

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

Accounting Equation

Assets= Liabilities + Owner's Equity

Categories of Fixed Costs

Committed FC- costs that are long-term in nature and are difficult to cut back to zero without impacting profitability or long-term goals Discretionary FC- costs that are usually annual in nature and can be cut back for short period of time without too much impact on the company

EBITDA

Earnings Before Interest, Taxation, Depreciation, and Amortization

3 F's of Investors

Friends Family Fools

2 Largest governmental grant programs that are specifically intended for small businesses

Small Business Innovation Research (SBIR) program & Small Business Technology Transfer (STTR) program

Critter Wines

Wines identified by an animal on their trademarked labels

Sole Proprietorship

a business owned by a single individual who is responsible for all debts and claims against a business

Return on Investment (ROI)

a capital budgeting equation used to measure the relationship between initial investment and the profits that are expected to be received from making the investment

Limited Partnership

a legal form of business organization that is created by filing required documentation with a state government; within a limited partnership, one or more partners may have no liability for the debts and actions of the partnership

Limited Liability company (LLC)

a legal form of business organization that is created by fling required documentation with a state government; LLC's have a choice, under federal tax law, of being taxed as either corporations or partnerships

Debt

a legal obligations to pay money in the future

Food Desert

a low-income urban, suburban or rural area where there are limited vendors of fresh produce but many fast-food outlets

Nepotism

a management philosophy of selecting and promoting people based on family ties

Age Discrimination in Employment Act (ADEA)

an act of Congress that makes it illegal to discriminate against people who are older than 40 years of age

Americans with Disabilities Act (ADA)

an act of congress that requires that businesses make provisions for access by disabled people

Litigation

an action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.

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

Graphene

an allotrope of carbon; the strongest, thinnest material known to exist & one of the most pliable

Short-term debt

any debt that must be paid in less than one year from the date of the financial statement on which it is reported

Deposits and Progress payments

cash payments received before product is completed or delivered

Aerotropolis

city intentionally planned and built around a major airport

Equal Employment Opportunity Commission (EOCC)

commission established to enforce the provisions of the Equal Employment Opportunity Act

Trade Secret

confidential information within a company that gives that company a competitive advantage

Internet of Things

connection of objects on the Internet; enables remote control & beaming out user data

Locavore

consumers who have a preference for purchasing food that is produced within a short distance from where they live

Float

delays in the movement of money among depositors and banks

Articles of Organization

document setting forth information about a limited liability company that is filed with the state to establish an LLC

Copyright

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

Weighted Average Cost of Capital (WAC)

expected average future cost of the funds

Range Anxiety

fear based on the concern that the limited cruising distance of current electric cars-- and the lack of a charging infrastructure-- leaves drivers and passengers at risk of being stranded

Contingency fees

fees paid by a client to an attorney for legal services that is dependent upon the outcome of the case

Cottage Foods

food items prepared and stored in an individual's unlicensed and un-inspected residential kitchen, and available for sale directly to consumers; some US states allow sales of such foods that are deemed to be non-potentially hazardous

Employee Stock Ownership Plan (ESOP)

formalized legal method to transfer some or all of the ownership of a business to its employees

Grants

gifts of money made to a business for a specific purpose

Demand deposits

money held in checking and savings accounts

Outsourcing

obtaining a needed business process from a firm that is independent of the entrepreneur's business

Black Swan

occurrence (or non-occurrence) of an event that is unexpected and has an extreme impact

Ghost Brands

older consumer brands that lose market share when the marketer decreased brand advertising with consequent decline in consumer demand for the brand

Astroturfing

online postings that appear to be genuine (positive or negative) "grassroots" arguments but are written by parties who are in the employ of an enterprise and whose true identity and leanings are masked by their online identity

Consignment

practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold

Crowdsourcing

practice of allowing anyone to contribute to solving problems or completing a project by using online connections to link interested parties-- who are usually volunteers-- and allow them to contribute specific knowledge and talents directed at a common objective

Third Places

public places that are neutral, convenient and comfortable location where people regularly gather for conversation and companionship (in contrast to home--the "first place"--and work--and the "second place"); examples include: coffee shops, cafes, soda fountains, taverns and public spaces; term was coined by urban sociologist Ray Olderburg

Accredited Investors

qualified investors must be able to demonstrate knowledge, financial strength, and investment experience that prove they can tolerate the risk of such an investment

Marketable securities

stocks and bonds that are traded on an open market

Arbitration

technique for the resolution of disputes outside the courts. The parties to a dispute refer it to arbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts.[1]

Payback period

the amount of time it takes a business to earn back the funds it paid out to obtain a capital asset

Dunbar's Number

the idea that a person can only have a limited number of close relationships, probably around 150

Barter

the practice of trading goods and services without the use of money

Showrooming

the retail consumer practice of seeing, and gathering information about a product in a "bricks-and-mortar" store but subsequently purchasing the same product via a rival retailer's website, often at a lower price

Desperation Week

the seven days before Christmas Day when many last-minute shoppers buy last-minute gifts

Variable Costs

those costs that change with each unit produced, for example, raw materials

Fixed Costs

those costs that remain constant regardless of quantity of output, for example, rent

Cash-to-cash cycle (also known as Operating Cycle)

time that is required for a business to acquire resources, cover them into product, sell the product, and receive cash from the sale

Separation of Duties

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

Freemium app

users download free software but pay to access features

Patent

a grant by the US government to an inventor for an idea that is new, useful, and non obvious, giving the inventor the exclusive right to make, use, or sell his or her idea

Beauty Junkie

a high-frequency, big-spending cosmetics shopper

Corporation

a legal "artificial" entity that is formed by filing specific documents with a state government

Liquidity

a measure of how quickly a company can raise money through internal sources by converting assets to cash

Overdraft

a negative balance in a depositor's bank account

STEM

acronym for the fields of science, technology, engineering, and mathematics

General Partnership

all partners are equally and fully responsible for the business's obligations

Receivables

amounts that are owed to a business for merchandise that was sold on credit

Accelerator

an organization that supports start-up technology businesses by providing inexpensive office space, a variety of support services, and resources; most accelerators are associated with universities

Fidelity bonds (also known as dishonesty bonds)

bonds that repay employers for losses caused by dishonest or negligent employees

Factoring Receivables

borrowing money secured by a firm's accounts receivable

Co-Insurance

contract stipulation that requires a policyholder to carry insurance in an amount equal to a stated minimum percentage of the market value of the property insured

Trademark

distinctive word, slogan, or image that identifies a product and its origin

Occupational Health and Safety Administration (OSHA)

government agency created to enforce safety in the workplace

July Effect

increase in mortality, medical errors and length of patient stays at hospitals during the month of July each year, which is attributed to the annual changeover of residents, when the most experienced residents leave and the newest residents assume responsibilities for clinical care

Vicarious (indirect) Liability

indirect liability or responsibility for the actions of another

Networking

interacting with others in order to build relationships useful to a business

Mediation

intervention in a dispute in order to resolve it; arbitration.

Smart Labels

labels with tiny printable electronics able to generate, store and share information

Urban Mining

the practice and process of extracting a wide range of valuable metals from discarded electronic equipment

Retained Earnings

the sum of all profits and losses, less all dividends paid since the beginning of the business

Agritourism or Agri-tainment

tourism and entertainment activities undertaken by small farmers to produce additional income from traditional farm properties (corn maze)

Initial Public Offering (IPO)

transfer method describing the first-time public sale of a stock listed on a public stock exchange

Employee Collusion

two or more employees that decide to cooperate from stealing company property

Black Hat SEO

using search engine optimization techniques that take advantage of Google's search algorithms but violate Google's guidelines

Gift

valuable assets or services donated to the business without any obligation to repay or give up any ownership interest

Subscription Commerce

when consumers pay for monthly home delivery of goods

Cloud Computing

a service accessed from any personal computer or mobile device that uses Internet connections to store data, use email and access software applications on remote server systems rather than relying on a user's personal computer or mobile device for storage, email or software

Payables

amounts owed to vendors for merchandise or services purchased on credit

Pro forma statements

latin for "in the form of" when used to describe financial statements, indicated estimated or hypothetical information

Meritocracy

management philosophy of selecting and promoting people based solely on their being the most capable person for the job

Financial Leverage

measure of the amount of debt relative to total investment

Equity Capital

money contributed to the businesses in return for part ownership of the business

Exculpatory clause

part of a contract in which a party to the contract states that he or she will not be responsible for certain actions

Noncompete clause

part of a contract in which a person agrees to not open a certain type of business or seek employment doing certain things in a particular area for a period of time

Flexitarians

people who usually eat the same as vegetarians but eat meat sometimes

Cost of Capital

percentage cost of obtaining future funds

Trade Discounts

percentage discounts from gross invoice amounts provided to encourage prompt payment

Independent contractors

persons working to achieve a certain goal without being subjected to substantial controls by another

Bioplastics

plastics derived from plant materials rather than petroleum products

3-D Printer

a machine that creates a three-dimensional object from a digital blueprint file by "printing" the object using a nozzle to layer plastic or metal according to the three-dimensional specifications indicated in the digital blueprint; also known as additive manufacturing, direct-digital manufacturing, fabricator or fabber