BA 101 (Homework)
Which four institutions are members of the U.S. banking system?
. Commercial banks . saving and loans . credit union . non-banks that offer financial services
Needs for operating funds include:
. Making capital expenditures . Acquiring needed inventory . Controlling credit operations
In factoring, the discount given depends on what?
. The age of the accounts receivable . The condition of the economy . The nature of the business
What are the three steps to financial planning?
1. Forecasting the firms short-term and long-term financial needs 2. Developing budgets to meet those needs 3. Establishing financial controls to see whether the company is achieving its goals
What are the three most common reasons a firm fails financially?
1. Undercapitalization (insufficient funds to start the business) 2. Poor control over cash flow 3. Inadequate expense control
Materials Requirement Planning (MRP)
A computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place.
Balance sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
Income Statement
A financial statement that shows a firm's bottom line- that is, its profit (or loss) after costs, expenses, and taxes
Reserve Requirement
A percentage of commercial banks checking and savings accounts they must keep in the bank.
Commercial Bank
A profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans.
Inancial Statement
A summary of all the financial transactions that have occurred over particular period.
3D printing is a production process also known as...
Additive manufacturing
What are the steps in the Accounting Cycle?
Analyze source documents, record transactions in journal, transfer, take a trial balance, prepare financial statements, analyze financial statements
Assets
Are economic resources (things of value) owned by a firm. Assets include productive, tangible items such as equipment, buildings, land, furniture, and motor vehicles that help generate income, as well as intangible items with value like patents, trademarks, copyrights, and goodwill.
Nonbanks
Are financial organizations that accept no deposits but offer many of the service provided by regular banks. Includes: . life insurance companies . pension funds . brokerage firms . commercial and consumer finance companies
Credit Union
Are non-profit, member-owned financial cooperatives that offer the full variety of banking services to their members-interest-bearing checking accounts at relatively high rates, short-term loans at relatively low rates, financial counseling, life insurance policies, and a limited number of home mortgage loans.
What is the fundamental accounting equation?
Assets= Liabilities+ Owners' equity
secured loan
Backed by collateral, something valuable such as property.
The check clearing role of the federal reserve allows ______
Banks to settle the check payments between banks in different parts of the country.
Which are considered to be nonbank financial institutions?
Brokerage firms pension funds insurance companies
Ratio Analysis
Calculating and interpreting financial ratios developed from the firm's financial statement
The federal reserve banks serve as the national _________ for checks
Clearinghouses
Financial management is the heart beat of what? and what keeps the heartbeat stable
Competitive business, Accounting information
Open Market
Consists of the buying and selling of government bonds.
operating expenses
Costs involved in operating a business, such as rent, utilities, and salaries.
During tough economic times, customers are happy when firms extend_________ for purchases
Credit
What's the correct order in the production process?
Inputs, production, controls, outputs
Reaching Beyond Our Borders...
Is a box that looks at how American Manufacturer Tesla has experienced multiple problems in its attempt to build an auto plant in Germany.
Finance
Is the function of business that acquires funds for the firm and manages them within the firm.
Less manufacturing uses...
Less time and less resources.
What are four main types of financial ratios used in ratio analysis?
Liquidity ratio, debt ratio, profitability ratio, and activity ratios
Capital expenditures
Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights.
Which sector has lost more jobs due to technological changes?
Manufacturing
The_____sector has lost more jobs due to technological changes than the _____sector
Manufacturing, Services
Liquidity Ratio
Measures a company's ability to turn assets into cash to pay its short-term debts (must be repaid within one year)
Cost of goods sold
Measures the cost of merchandise the firm sells or the cost of raw materials and supplies it used in producing items for resale.
Operation Managers
Must ensure products are manufactured and delivered on time, on budget, and ti specifications.
Managerial Accounting
Provides information and analysis to managers inside the organization to assist them in decision making.
Leverage
Raising funds through borrowing to increase the firm's rate of return.
Auditing
Reviewing and evaluating the information used to prepare a company's financial statements.
Budget
Sets forth management's expectations for revenues and allocates the use of specific resources throughout the firm.
Setting the reserve requirements, setting the discount rate, and collection data on the money supply are all the activities of _______?
The Federal Reserve
Discount Rate
The interest rate the Fed charges for loans to member banks.
Financial management
The job of managing a firm's resources to meet goals and objectives.
Revenue
The monetary value of what a firm received for goods sold, services rendered and other payments (such as rents received, money paid to the firm for use of its patents, interest earned, etc.)
True or false: Computers are used to design products when CAD is employed
True
savings and loan association
a financial institution that traditionally specialized in savings accounts and mortgage loans but now offers many of the same services as commercial banks
Financial Control
a process in which a firm periodically compares its actual revenues, costs, and expenses with its budget
Operation Management
a specialized area in management that converts or transforms resources, Including Human Resources like technical skills and innovation, into goods and services.
Annual report
a yearly statement of the financial conditions, progress, and expectations of an organization
Debt Financing
borrowing money the company has a legal obligation to repay; firms can borrow by either getting a loan from a lending institution or issuing bonds
interfirm process
companies work closely together to design, produce, and ship products to customers
Quality
consistently producing what the customer wants while reducing errors before and after delivery to the customer
Liabilities
debts that you owe
flexible manufacturing
designing machines to do multiple tasks so that they can produce a variety of products
A type of problem that operations management planning helps to solve as it relates to manufacturing is:
facility layout
True or false: ISO is a governmental body
false
Short-term forecast
forecast that predicts revenues, costs, and expenses for a period of one year or less
Financial Accounting
generates financial information and analyses for people primarily outside the organization
Information Technology (IT)
gives firms and employees increased flexibility to choose locations while staying in the competitive mainstream.
Operations management in the service industry...
is all about creating a good experience for those who use the service.
The Just-in-time inventory method...
is designed to keep a minimum of parts, supplies, and other materials on hand just in time to go on the assemble line.
Production
is the creation of finished goods and services using the factors of production: Land, labor, capital, entrepreneurship, and knowledge.
When considering ______-______ financing options a financial manager must consider the organization's financial goals and objectives
long-term
Leverage ratio
measure the degree to which a firm relies on borrowed funds in operation
electronic funds transfer system (EFT)
messages about a transaction are sent from one computer to another
Accounting
planning, recording, analyzing, and interpreting financial information
Statement of cash flow
reports cash receipts and cash disbursements related to the three major activities of a firm: . Operations . Investments . Financing
Commercial paper
short-term unsecured debt issued by large corporations
activity ratio
tells us how effectively management is turning over inventory
Overall company quality is outlined by the standards set by...
the Malcolm Blaldrige National Quality Award.
Cash flow
the difference between cash coming in and cash going out of business.
Purchasing
the function in a firm that searches for high-quality material resources, finds the best suppliers, and negotiates the best price for goods and services
Federal Deposit Insurance Corporation (FDIC)
the government agency that insures customer deposits if a bank fails
facility layout
the physical arrangement of resources (including people)to most efficiently produce goods and provide services for customers.
Trade credit
the practice of buying goods and services now and paying for them later. It is the most widely used resource of short-term funding, the least expensive, and the most convenient.
facility location
the process of selecting a geographic location for a company's operations
Factoring
the process of selling accounts receivable for cash
lean manufacturing
the production of goods using less of everything compared to mass production