Business EOPA

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Cost of goods sold (COGS)

(expense on income statement) the cost of inventory that has been sold

Profit

A financial gain, esp. the difference between the amount earned and the amount spent in buying, operating, or producing something

Bond

A financial security that represents a promise to repay a fixed amount of funds

Balance sheet

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

Market

A group of buyers and sellers of a particular good or service

Inventory

A list of possessions or goods on hand.

Staffing

A management function that includes hiring, motivating, and retaining the best people available to accomplish the company's objectives

Amortization

A method for computing equal periodic payments for an installment loan.

Tactical planning

A set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing.

Trial balance

A summary of all the financial data in the account ledgers that ensures the figures are correct and balanced.

Annual report

A yearly statement of the financial condition, progress, and expectations of an organization.

Profit and loss account

Accounts that show how the net profit of a business and the retained profit of a company are calculated.

Liability

An amount owed by a business

Product oriented

An approach to business that centers on capturing business by focusing on creating and manufacturing better products at lower prices

Decision making

Assessing and choosing among alternatives.

The basic equation that has to balance is:

Assets = Liabilities + Shareholders´ equity

Intangible assets

Assets that do not have physical substance.

Non-operating income

Business income that is not received from sales of products; for example

Retailers

Buy goods from wholesalers or directly from the manufacturers and resell to the consumer

Selling

Communicating directly with potential customers to determine and satisfy their needs.

Sales oriented

Companies emphasized widespread distribution and promotion in order to sell products and services

Operating expenses

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

Working capital

Current Assets - Current Liabilities

Accounts payable

Current liabilities are bills the company owes to others for merchandise or services purchased on credit but not yet paid for.

External customers

Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use

EBITDA

Earnings before interest, taxes, depreciation, and amortization

Treasurer is (responsible for)

Investing of money

What is management

It is the process of accomplishing the goals of an organization through the effective use of people and resourses

Free-rein leadership

Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives.

Long-term liabilities

Liabilities owed for more than a year.

Liquidity ratios

Measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.

Accounting

Planning, recording, analyzing, and interpreting financial information.

Brainstorming

Problem-solving technique that involves considering all possible solutions without making prior evaluative judgments.

Retained profit

Profit which is kept back in the business and used to pay for investment in the business.

PMI

Project Management Institute

Buying

Purching stock with a little money down with the promise of paying the balance at sometime in the future

Researching

Studying buyer interests and needs, testing products, and gathering facts needed to make good marketing decisions

Objectives

Tasks that are intended to be accomplished by a specific date, and are stated in specific terms so that they are measurable

Activity ratios

Tell us how effectively management is turning over inventory

Technical skills

The ability to apply specialized knowledge or expertise.

Conceptual skills

The ability to see the organization as a whole, understand how the different parts affect each other, and recognize how the company fits into or is affected by its environment

Market research

The activity of gathering information about consumers' needs and preferences

Problem solving

The behavior of individuals when confronted with a situation or task that requires insight or determination of some unknown elements.

Top management

The highest level of management, consisting of the president and other key company executives who develop strategic plans.

Functions of Management:

The process of coordinating work activities so that an organization's objectives are achieved efficiently and effectively with and through other people

Contingency planning

The process of preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives

Factoring

The process of selling accounts receivable for cash.

Operational planning

The process of setting work standards and schedules necessary to implement the company's tactical objectives

Goals

Things you aim for that take planning and work

Middle management

Which level of management includes job titles such as general manager, division manager, or plant manager

Depreciation

a lessening in value; a belittling

Mortgage

a specific type of loan that is used to buy real estate

Mission statement

a statement of the firm's business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions

Cash flow statement

a summary that shows total income and spending for a given time period

Ledgers

account book of final entry, in which business transactions are recorded

Funds

amounts of money given to organizations or people to be spent for a purpose

Debt financing

arranging funding by borrowing money

Equity financing

arranging funding by selling ownership shares in the company, publicly or privately

Risk taking

bearing the uncertainties that are part of the marketing process

Goodwill

benevolence

Financial accounting

consists of documenting all the transactions of a company that have an impact on the financial state of the organization and then using those documented transactions to create reports for investors and external agencies.

Issues in financial management

cost centres, profit centres, variance analysis, costing methods (standard versus marginal costing), valuing assets

Solutions for managing cash flow

credit control, stock control, expenditure control, marketing initiatives, using an outside company to recover a debt

Customer oriented

describes a firm in which all decisions are made with a conscious awareness of their effect on the consumer

The P&L account ends with...

earnings (= profit / the bottom line)

Vision Statement

expresses what the organization should become, where it wants to go strategically

Grading and valuing

grouping goods according to size, quality, or other characteristics, and determining appropriate price for products and services

SWOT analysis

identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)

Internal customers

individuals and units within the firm that receive services from other individuals or units

Wholesalers

intermediaries that sell products to other intermediaries for resale or to organizations for internal use

Participative (democratic) leadership

involves followers heavily in the decision-making process by using group involvement to set basic objectives, establish strategies, and determine job assignments.

Fixtures

items of personal property that are attached or annexed to real property

Fixed assets or long-term assets

items that are relatively permanent, such as land, buildings, and equipment

Current assets or short-term assets

items that can or will be converted into cash within one year; may also include marketable securities

Chief accounting officer (is responsible for)

keeping the company´s books, preparing financial statements, preparing tax returns, developing strategies to minimize taxes

Causes of cash flow problems

late payments and non-payments, unforeseen costs, unexpected changes in demand, over-borrowing from the bank to finance expansion plans

Autocratic leadership

leadership style that involves making managerial decisions without consulting others

Bank debt

loan capital including also any overdraft (temporary negative balance)

Profitability ratios

measure the earnings or operating effectiveness of a company

Securities

monitors the stock market and enforces laws regulating the sale of stocks and bonds

Provisions

necessary supplies, such as food

Leverage (debt) ratios

one of several financial measurements that look at how much capital comes in the form of debt (loans), or assesses the ability of a company to meet financial obligations

Supervisory management

perform hands on functions in addition to supervisory functions. Direct daily work, create work schedules, and monitor the quality of the work and productivity of staff. They also train and recruit.

Financial controller (is responsible for)

planning, monitoring (comparing planned spending with actual spending), producing financial data for the senior management team, analysing major financial decisions

Financing

provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products

Current liabilities or short-term liabilities

salaries and wages payable

Accrued salaries

salaries paid for after the service has been performed, typically includes future bonuses

Human relations skills

skills that involve communication and motivation; they enable managers to work through and with people

Asset

something of value; a resource; an advantage

Accrued taxes

taxes built up over time, unpaid taxes

Marketing

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Marketing concept

the idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives

Strategic planning

the managerial process of creating and maintaining a fit between the organization's objectives and resources and the evolving market opportunities

Storing

the marketing function of holding goods so they're available when they're needed

Transporting

the marketing function of moving goods

Knowledge management

the process by which customer information is centralized and shared in order to enhance the relationship between customers and the organization

Bookkeeping

the recording of business transactions

Shareholders´ equity

the shareolder's claims on a company's assets after all of its creditors have been paid

The P&L account begins with...

total sales (=revenue) generated during a month, quarter or year

Organization chart

traces the line of authority within the corporation


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