Business EOPA
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