MGT 360 Ch 11-16
direct mail
a method of selling in which catalogs, brochures, letters, videos, and other pieces of marketing materials are mailed directly to customers from which they can mail, call, or email an order.
wholesaler
a middleman business which buys and sells in to businesses rather than consumer
agent
a middleman business which represents a manufacturers product or service to other business to business middleman firms
retailer
a middleman business which sells to consumers or end users of a product
sheltered workshop
a nonprofit organization or institutions that provides business services by using handicapped or rehabilitated workers
MACRS rate
an internal revenue service acronym for the modified accelerated cost recovery system lets taxpayers depreciate more of the cost earlier in the life of a capital expense
internal cost factors
aspects of or choices within the business which could cause the business's cost to change
external cost factors
aspects of the world outside the business which could cause the business costs to change
cash equivalents
assets that may be quickly converted to cash
open ended questions
questions that allow respondents to express themselves as they choose; what do you you like about this book
categorical question
questions that are answered by selecting the proper category; whats is your ethnicity white hispanic etc
scalar questions
questions that are answered by some sort of scale; 1-5 example
dichotomous questions
questions that have only two possible choices; shopped here before??
depreciation
regular and systematic reduction in income that transfers asset value to expense over time
variance analysis
the process of determining the effect of price and quantity changes on revenues and expenses
market segmentation
the process of dividing the market into groups that have somewhat homogeneous needs for a product or service
investing activities
the purchase and sale of land, buildings, equipment, and securities
accounting equation
the statement that assets equal liabilities plus owners equity
retained earnings
the sum of all profits and losses, less all dividends paid since the beginning of the business
cash to cash cycle
the time that is required for a business to acquire resources, convert them into product, sell the product, and receive cash from the sale
guerrilla marketing
the use of creative and relatively inexpensive ways to reach your customer. examples include door knob hangers, flyers under windshield wipers, t shirts , balloons, and messages written on sideswalks
multichannel marketing
the use of several different channels to reach your customers, for example a website, direct mail, and traditional retailing
current ratio
the value of current assets divided by current liabilities
cost
the values given up to obtain something that you want
Fair Credit Reporting Act
U.S. federal legislation specifying consumers' rights vis a vis credit reporting agencies
focus group
a form of data gathering using a small group led by a moderator
debt
a legal obligation to pay money in the future
financial leverage
a measure of the amount of debt relative to total investment
costs of goods sold budget
a schedule that shows the predicted cost of product actually sold during the accounting period
factoring receivables
borrowing money secured by a firm's accounts receivables
deposits and progress payments
cash payments received before product is completed or delivered
bank ledger balance
the sum of deposits and withdrawals recorded in a bank's accounting records
bank available balance
the sum of money that has actually been received and paid out of a depositors account
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 like rent
diversify
to invest in multiple investment of differing risk profiles for the purpose of reducing overall investment risk
partnership
two or more people cooperating to conduct a business enterprise
capital assets
assets that are expected to provide economic benefits for periods of time greater than one year
outsourcing
comprises obtaining a needed business process from a firm that is independent of the entrepreneurs business
float
delays in the movement of money among depositors and banks
straight line for a useful life of 10 years
depreciation is computed using a straight line method so an asset would lose 10% of its value each year
inventory valuation
determination of the amount of assets held by the firm for sale or production
tax credits
direct reductions in the amount of taxes that must be paid, dependent upon meeting some legal criteria
outflow
funds being paid to others by the firm
point of sale POS system
hardware and software combinations that integrate inventory management directly into accounting software
debt capital
money borrowed for the purpose of investment in a business
equity capital
money contributed to the businesses in return for part ownership of the business
outside equity
money form selling part of your business to people who are not and will not be invoked in the management of the business
accounts receivable
money owed to your business by customers who purchased your product on credit
bar coding
obtaining a Universal Product Code number and scan ready visual tag, and printing it on the product or its packaging. can be scanned and recognized by others
small business investment companies
private businesses that are authorized to make SBA insured loans to start ups and small businesses
inventory
products that are held for sale to customers
noncore projects
revenue producing tasks and activities related to but not part of the primary strategy of a business
collateral
something of value given or pledged as security for payment of a loan; may consist of financial instruments, such as stocks, bonds, and negotiable paper, or of physical goods, such as trucks, machinery, land or buildings
efficiency
the comparison of productivity ratios to see the extent that an organization has generated more outputs with fewer inputs
replacement value
the cost incurred to replace one asset with an identical asset
cost of operating
the direct cost incurred in using an asset for the purpose for which it was inteded
inputs
the materials, labor and energy put into the production of a good or service
disposal value
the new amount realized after subtracting the costs of getting rid of an asset from its selling price
gain on investment
the percentage amount that the payout of an investment differs from original cost: calculated as payout - investment +dividends / investments
cost of capital
the percentage cost of obtaining future funds
consignment
the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold
barter
the practice of trading goods and services without the use of money
fair market value
the price at which goods and services are bought and sold between willing sellers and buyers in an arms length transaction
feedback
the process of communicating within or to the organization about how the outputs worked or were received
capital budgeting
the process of deciding among various investment opportunities to create a specific spending plan
periodic inventory
the process of physically counting business assets on a set schedule
operations
the process of transforming materials labor and energy into goods or services
optimum capital structure
the ratio of debt to equity that provides the maximum level of profits
return on equity
the ratio of profits to owner investment in a business
company book balance
the sum of cash inflows and cash outflows recorded in the firm's accounting records
financial risk
uncertainty of returns the probability of losing money
bootstrapping
using funds generated by business operations to capitalize growth
gaming the payment process
using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided
gift
valuable assets or services donated to the business without any obligation to repay or give up any ownership interest
bot
web based program that uses artificial intelligence techniques to automate tasks such as searches
sole proprietorship
a business owned by a single individual who is responsible for all debts and claims against the business
credit reporting agency
a business that collects, collates, and reports information concerning an entity's use of debt
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
cash budget
a cash budget identifies when how and why cash is expected to come into the business and when how and why it is expected to leave
interest
a charge for the use of money usually figured as a percentage of the principal
physical inventory
a count of all the inventory being held for sale at a specific point in time
growth trap
a financial crisis that is caused by a business growing faster than it can be financed
budget
a financial plan for the future, based on a single level of operations; a quantitative expression of the use of resources necessary to achieve a businesses strategic goals
financial accounting
a formal, rule based set of accounting principles and procedures intended for use by outside owners, investors, banks, and regulators
plant
a general term for the facilities of a business
corporation
a legal artificial entity that is formed by filing specific documents with a state government
tax abatement
a legal reduction in taxes by a government
differentiated strategy
a marketing strategy in which a marketer selects two or more distinct groups of consumers and designs specific marketing mixes to meet their needs
timing purchases
a method of controlling the timing of cash outflows that is invisible to suppliers and vendors
overdraft
a negative balance in a depositors bank account
discounts for prompt payment
a reduction in sales price provided to a credit customers for paying outstanding amounts in a timely manner
charge back
a reduction in the bank account of a merchant by a credit card company
cash disbursements budget
a schedule of the amounts and timings of payments of cash out of a business
cash flow statement
a statement of the sources and uses of cash in a business for a specific period of time
income statement
a statement that lists revenues and expenses and shows the amount of profit a business makes for a specified period of time
perpetual inventory
a system of recording the receipt and sale of each item as it occurs
best practices
activities identified by authoritative bodies as examples of optimal ways to get things done in a particular industry profession or trade
foundation
an institution to which private wealth is contributed and form which private wealth is distributed for public purposes
accelerator
an organization that supports start up technology businesses by providing inexpensive office space, a variety of support services and resources; most are associated with universities
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
bearer
any person or business entity who possesses a security
optimum stocking level
(reorder point) the amount of inventory that results in the min cost when considering the cost of lost sales resulting from running out of stock, the number of units sold per day, and the number of days required to receive inventory
arm's length transaction
a business deal where the parties have a prior relation or affiliation, but where the business is conducted as if they were unrelated. done to help guard against potential conflicts of interest
property
a general term for real estate but it can also be applied as a legal term for anything owned or posssessed
favorable/unfavorable variance
a label applied to variance to indicate their effect upon the income statement; favorable variances would result in profits being greater than budgeted all other things being equal; unfavorable would result in profits being less than budgeted all other things being equal
capital lease
a lease in which at the end of the lease period the asset becomes the property of the lessee, possibly with an additional payment
limited liability company
a legal form of business organization that is created by filing required documentation with a state government. have a choice under federal tax law, of being taxed as either corporations or partnerships
lock box
a locked receptacle for money, the keys to which are not available to those who physically handle the receptacle; a common example is the coin receptacle for parking meters which cannot be opened by the workers who are responsible for collecting the deposited coins
operating lease
a long term rental in which ownership of the asset never passes to the person paying for the lease
cost volume profit analysis
a managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales to maximize profits
concentrated strategy
a marketing strategy in which a marketer selects one specific group of consumers and designs a marketing mix specifically for that group
undifferentiated strategy
a marketing strategy that uses no segmentation; assumes that all consumers have virtually identical needs and can be reached by the same marketing mix
liquidity
a measure of how quickly a company can raise money through internal sources by converting assets to cash
born international
a new firm that opens a website immediately, thus being exposed to customers from around the world
cash receipts budget
a schedule of the amounts and timings of the receipt of cash into a business
microinventory
a set of goods or service that consists of only one or a few items
financial management
a set of theories and techniques used to optimize the receipt and use of capital assets
balanace sheet
a statement of what a business owns and what it owes to others and how much value the owners have invested in it
safety stock
an amount of inventory carried to ensure that you will not run out of inventory because of fluctuating levels of sales
clearinghouse
an entity that processes checks and electronic fund transfers for banks and other financial organizations
community development organization
an organization authorized by the SBA to make insured loans to small businesses that are expected to increase economic activity within a specific geographic area
cost of owning
cost incurred in financing, insuring, taxing, or tracking an asset
cost of disposition
cost incurred in the activities necessary to get rid of an asset
grants
gifts of money made to a business for a specific purpose
pledging receivables
giving a third party legal rights to debts owed your business in order to provide assurance that borrowed money will be repaid
supply chain
line of distribution of a product form its start as materials outside the target firm to its handling in the target firm to its handling by sellers into the hands of customers
dividends
payments of profits to the owners of corporations
quality
products or services fitness for use measured as durability reliability serviceability style ease of use and dependability
noncash incentives
rewards that do not require payment of cash, such as stock options, compensating time off, or added vacation
factoring
selling the rights to collect accounts receivables to an entity outside your business
payback period
the amount of time it takes a business to earn back the funds it paid out to obtain a capital asset
profit, profitability
the amount that revenues exceed expenses
articulate
the concept that information flows form the income statement through the statements of retained earnings and owners equity to the balance sheet
owners equity
the difference between assets and liabilities of a business
economy of scale
the idea that is cheaper per item to make many of an item than few
risk
the level of probability that an investment will not produce expected gains
productivity
the ratio measure of how well a firm does in using its inputs to create outputs, literally, productivity is outputs divided by inputs
outputs
the service or product that is produced for sale
whole of life costs
the sum of all costs of capital assets, including acquisition, ownership, operation and disposal
acquisition cost
the total cost of acquiring an asset, including such costs as purchase price, transportation, installation, testing and calibrating in order to ready it for its first productive use
replacement cost
the total cost of replacing an asset with an essentially identical asset
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
angel investor
a wealthy individual who invests in companies in relatively early stages of development
trade discounts
percentage discounts from gross invoice amounts provided to encourage prompt payment
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
nonsufficient funds
a situation that occurs when a check is returned to a depositor because the writer of the check did not have a bank available balance equal to or greater than the amount of the check
reconciling
an accounting process that identifies the cause of all differences between book and bank balances
book value
the difference between the original cost of an asset and the goal amount of depreciation expense that has been recognized to date
manufacturer
the entity which produces a product or service to be sold
weighted average cost of capital WACC
the expected average future cost of funds
demand deposits
money held in checking and savings accounts
cash
money that is immediately available to be spent
master budget
a budget, also referred to as a comprehensive budget, consists of sets of budges that detail all projected receipts and spending for the budgeted period
financial flexibility
a businesses ability to manage cash flows in such a manner that the company can respond appropriately to unexpected opportunities and needs
fulfillment center
a company that will warehouse your products and fill your customers orders for you
survey
a data collection method of using a questionnaire - in person on phone on paper or on the internet
expense
a decrease in owners equity caused by consuming your product or service
letter of credit
a document issued by a bank that guarantees a buyers payment for a specified period of time upon compliance with specified terms
documentary draft
a draft which can be exercised only when presented with specified shipping documents
manufacturers' suggested retail price
a target price set by a manufacturer for a product or service intended to provide profit for each intermediary in the distribution channel
managerial accounting
accounting methods that are specifically intended to be used by managers for planning, directing and controlling a business.
operating activites
activities involved in producing and selling goods and service
financing activities
activities through which cash is obtained from and paid to lenders, owners, and investors
payables
amounts owed to vendors for merchandise or services purchased on credit
receivables
amounts that are owed to a business for merchandise that was sold on credit
money
an accepted medium of exchange
tax accounting
an accounting approach based on specific accounting requirements set by governmental taxing agencies
activity based cost estimates
an accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service
e tailer
an electronic retailer; a store that exists only on the internet
contract manufacturing
an existing firm with the correct manufacturing capabilities makes your product for you
revenue
an increase in owners equity caused by selling your product or service
differential advantage
characteristic that separates one company from another in product, price, promotion, and or distribution
indirect competition
companies that provide alternatives that are dissimilar to your product/service that consumers might choose to meet a similar need; coca cola includes any other company providing items to quench thirst
telemarketing
contact via telephone for the express purpose of selling a product or service. can either be inbound (customer calls company) or outbound (company calls customer)
ethnographic research
data gathered by simple observation - seeing what consumers do, rather than asking them
indirect exporting
exporting using intermediaries such as agents, export management companies, or exporting trading companies
direct exporting
exporting using no intermediaries
freight forwarders
firms specializing in arranging international shipments, packaging, transportation, and paperwork
financial statements
formal summaries of the content of an accounting systems records of transactions
GAAP
generally accepted accounting principles are the standardized rules for accounting procedures set out by the financial account standards board and used in all audits and submissions of accounting reports to the government
just in time inventory
having just enough product on your shelves to meet the immediate purchases. usually requires frequent shipment from your supplier
secondary research
information already collected for some other purpose than the current problem or questions
pro forma
latin for in the form of when used to describe financial statements, indicates estimated or hypothetical information
liabilities
legal obligations to give up things of value in the futre
direct sales
methods of going directly to your customer in order to sell your product. bending machines, door to door salespeople, leasing space at a craft fair, farmers markets party sales, and most industrial sales
primary research
new information collected to solve a problem at hand or answer current questions
commercial paper
notes issued by credit worthy corporations
traffic generators
other businesses that bring customers to the area
direct competition
other companies that make a similar product or provide a similar service; coca cola includes all other soft drink providers
channels
people and firms who connect producers of goods and services with customers
direct response advertising
placing an advertisement in a magazine or newspaper, on television or radio, or in any other media. the ad contains an order blank with a phone number and email or regular mail address with the intent of having the customer place an immediate order
mail order
sales made from ads in newspapers or magazines, with purchases made online or by phone as well as by mail
operating cycle
see cash to cash cycle
direct marketing
selling your goods or services to consumers without intermediaries, typically to select customer groups and typically with tracking of the results
break even point
the point at which total costs equal gross revenue
marketable securities
stocks and bonds that are traded on an open market
marketing research
systematic collection and interpretation of data to support future marketing decisions
marketing plan
systematic written plan of all phases of marketing for a business including information on the product, price, distribution, and promotion strategy, as well as a clear identification of the target market and competition
financial strength
the ability of a business to survive adverse financial events
going concern concept
the accounting concept that a business is expected to continue in existence for the foreseeable future
profit
the amount that revenues exceed expenses
currency
the bills and coins printed by governments to represent money
business entity concept
the concept that a business has an existence separate from that of its owners
variance
the difference between an actual and budgeted revenue or cost