operations and financial management
general expenses
Administrative expenses of the firm such as office salaries, insurance, and rent, utilities, and depreciation
gross profit(gross margin)
How much a firm earned by buying (or making) and selling merchandise
net income
Money leftover after deducting all expenses
depreciation
Systematic write-off of the cost of a tangible asset over its estimated useful life
selling expenses
The marketing and distribution of the firm's goods or services, such as advertising, salespeople's salaries, advertising, and supplies
production management
all activities managers do to help their firms create goods
fixed assets
assets that are relatively permanent such as land/buildings/equipment
investments
case used in or provided by the firm's investment activities
financing
cash raised by taking on new debt, or equity capital o chase used to pay business expenses, past debt, or company dividends
operations
cash transaction associated with running the business
costs of goods sold
cost of raw materials and supplies used for producing items for resale
operating expenses
costs involved in operating a business and includes selling and general
production
creation of finished goods/services using the factors of production
cash budget
estimates cash inflows and outflows during a particular period like a month or quarter
income statement
financial statement showing a firm's profit after costs/expenses/taxes
balance sheet
financial statement that reports a firm's financial condition at a specific time; assets, liabilities, and owners equity
statement of cash flows
financial statement that reports cash receipts and disbursements related to a firm's 3 major activities: operations, investments, financing
finance
function of business that acquires funds for the firm and manages the funds within the firm
debt financing
funds raised through various forms of borrowing that must be repaid
capital budget
highlights a firm's spending plans for major asset purchases that often require large sums of money
current assets
items that can/will be converted into cash within 1 year
financial management
job of managing the firm's resources so it can meet its goals/objectives
assets equation
liabilities + owner's equity
continuous process
long production runs turn out finished products over time
intangible assets
long-term assets that have no physical form but do have value (patents & copyrights)
revenue
monetary value of what a firm received for goods sold/services rendered/& other payments
equity financing
money raised from within the firm from operations/through the sales of ownership in the firm (stock/venture capital)
financial control
process in which a firm periodically compares its actual revenues/costs/expenses within its budget
intermittent process
production run is short and the machines are changed frequently to make different products
budget
sets forth management's expectations and allocates the use of specific resources throughout the firm
operations management
specialized area in management that converts/transforms resources into goods/services
financial statement
summary of all the transactions that have occurred over a particular period
equity
the owner's claims to the assets of the business; after taking out the liabilities
operating(master) budget
ties together all the firm's other budgets and summarizes its proposed financial activities
Liabilities
what the business owes to others
