BUS 285 Exam

Corporation

Distinguishes the business entity from the owner, but more complicated due to tax, accounting, record keeping and paperwork requirements; Requires establishment of a business name, appointment of directors, filing articles of incorporation, and following state requirements

Limited Liability Company (LLC)

Distinguishes the business entity from the owner; Protects the owner's personal assets from financial liability, and some protection against personal liability; Established under state law, so the rules governing a particular LLC could vary; If the owner does some thing fraudulent or illegal, there could be consequences and liability

Indirect quotation

Domestic currency is expressed in terms of foreign currency

Oligopoly (Market Structure)

Dominated by a few firms, limited competition; all firms maximize profits, oligopolies can set prices, some barriers to entry and exit, products could be differentiated, only a few firms are in the market (Sony, Nintendo)

Long-Term Liabilities

Due at any point after one year; Long-term Debt (interest and principle on issued bonds); Pension Fund Liability (money required to pay into employees' retirement accounts); Deferred Tax Liability (accrued taxes that will not be paid or another year, such as depreciation)

Current Liabilities

Due within one year, listed in order of their due date; Current portion of long-term debt, bank indebtedness, interest payable, rent, tax, utilities, wages payable, dividends payable, customer prepayments.

Volume Analysis

Examining the number of shares or contracts of a security that have been traded in a given time period; used by technical analysts as one of many factors that inform their trading decisions, as they can determine significance of changes in a security's price (Volume increases as price increases, vice-versa)

Cost-volume Profit Analysis (CVP)

Method of cost accounting, concerned with the impact that varing levels of sales and costs will have on operating profit. Determining the breakeven point of cost, and the volume of goods, and can be used for managers making short term economic decisions. (Price per unit x Number of units sold = total costs and operating profit)

Specialization

Method of production where a business focuses on the production of a limited scope of products or services, to gain greater degrees of efficiency (for example, many countries specialize in goods/services that are native to their part of the world)

Monopoly (Market structure)

Single firm controls the entire market; monopoly maximizes profit, it can set price, HIGH barriers to entry and exit, only one firm dominates; not desirable, as they result in lower output and higher prices (Monsanto)

Software As a Serivce

Software distribution model in which a third-party provider hosts applications, and makes them available over the internet

Web Services

Software systems designed to support machine-to-machine interaction over a network

Open Source Software (OSS)

Software that is free and available for anyone to look at, and potentially modify

Operating System (OS)

Software that supports and manages a computer's basic functions and programs

Emotional Model of Consumer Choice

Some make purchases based on joy, love, fear or hope; many want to preserve the past, worry less about price and focus on how the product makes them feel

Team

Special group with the commonality of a shared goal; creates a dynamic between team members, as they are all dependent on one-another for success

Value Proposition

Statement made by a company, summarizing why a consumer should buy or a product or use a service, convinces potential customers that their product/service will add more value or provide a greater benefit than competing products/services

Nonprofit Marketing

Strategies employed by a nonprofit organization designed to spread their message; Could involve creating logos, slogans, media campaigns to expose the organization to an outside audience; Like other organizations, NPO's should identify a target market, develop materials to reach that target market, and use the 4 P's to determine the objectives of its campaign

FV= Future Value PV= Present Value i= Interest Rate n= # of compound periods per year t= # of years

TVM Formula: FV = PV x (1 + (i/n)) ^ (n x t)

Long-Term Assets

Take longer than one year to convert; Long-Term Investments (securities that cannot be liquidated in the next year); Fixed Assets (land, machinery, equipment, buildings, and other capital intensive assets); Intangible Assets (intellectual property, goodwill, and other non-physical, yet valuable assets).

Promotion

Where and when can the marketing messages come across to the target market (online, TV, radio, etc.), when the best time to promote is (seasonality?), how do competitors promote their product?

Place (Distribution)

Where do buyers look for this kind of product, online or in-store, how can the right distribution channels be accessed, is a salesforce necessary, what competitors do and how you can learn from what they do

Statement of Financial Accounting Standards (SFAS)

Written by the Financial Accounting Standards Board (FASB), details the standards and guidance on account policies, in hope that all companies on the American Stock Exchange will adhere; Created to ensure a high level of corporate transparency.

Strategic Policy

Written statement of an organization's choices in its operating environment; IE, a nonprofit focuses societal issues or the environment, small business policies will describe thoroughly the positions of all employees, etc.; most organizations rely on employees to follow policy to accomplish strategic goals

Psychographic Segmentation

Segmenting by understading a consumer's lifestyle, interests and opinions

Geographic Segmentation

Segments by country, region, city, area code, etc.

Age Discrimination in Employment Act (1967)

Prohibits employment discrimination against applicants or employees aged 40 and older

Americans with Disabilities Act (1990)

Prohibits employment discrimination against qualified applicants or employees with a physical or mental disability

Civil Rights Act - Title VII

Prohibits employment discrimination based on race, color, religion, national origin and sex

Limited Liability Partnership (LLP)

Protects each partner's personal assets, and each partner from debts and liability incurred by the other partner

Benefit Segmentation

Segments customers based on the benefits they seek most in their products, such as convenience, prestige/status, value, need satisfaction, etc.

Relationship and Value

Services are about selling a relationship and the value of that relationship between the buyer and the seller; The client must perceive the value of the service through the seller

Time Value of Money (TVM)

"Discounted value", The idea that money available at the present time is worth more than the same amount in the future, due to potential earning capacity; Given that money can earn interest, it is worth more the sooner it is received

Laissez-Faire Leadership

"Hands-off" style, manager provides little to no direction, with as much freedom as possible; for highly experience employees who require little to no supervision

Systematic Risk

"Non-diversifiable risk" or "Market risk", inherent to the entire market, or market segment, cannot be removed in anyway; Due to fluctuations in a stock's price, interest rates, etc.

Democratic Leadership

"Participative" style, shares decision making abilities and ideas, encourages staff to be a part of decision making

First Degree Price Discrimination

"Perfect Price Discrimination"; When a company charges maximum possible price for each unit

One versus Many

Services typically have a single option available (rather than a product line), and it can be harder to promote and sell the reputation of a single service over the benefits of different products

Administrative Law

"Regulatory law"; The body of law that governs the administration and regulation of federal and state government agencies; Created by congress, it encompasses procedures under which agencies operate, and constraints upon them

Unsystematic Risk

"Specific risk" or "Residual Risk", comes with the company or industry you invest in; removed or lowered through diversifying the portfolio

Enterprise Resource Planning (ERP)

A software package that integrates many of a business' functions, such as accounting, finance, inventory management and human resources

Target Market

A targeted set of customers for whom it directs its marketing efforts; Can be segregated by age, geographical location, income, lifestyle, etc.

Compliance-Based code

Set out guidelines of conduct, and lay out penalties for violations; Often involves individuals facing penalties for failure to follow guidelines

Price fixing

Setting an item's price rather than it being naturally priced through free-market forces; Often involves colluding with competitors to buy or sell at an agree price

Social Responsibility

The idea that businesses should balance profit making activities with activities that benefit society, developing a positive relationship to the society in which they operate

Copyright

The legal right of the owner of intellectual property; The original creator of a product and anyone they give authorization to, are the only ones with exclusive right to reproduce the work

User Interface (UI)

The mechanism through which people interact with a computing device

Hurdle Rate

The minimum rate of return on a project or investment required by either a manager or investor, denoting appropriate compensation for the level of risk (higher risk = higher hurdle risk)

SQL

The most popular language for creating and manipulating databases

Hardware

The physical components of information technology

Spamming

The practice of sending unsolicited email and other electronic communication

Exchange rate

The price of a nation's currency, in terms of another currency.

Second Degree PD

When a company charges different prices for different quantities consumed, such as unusually large discounts on bulk purchases

Third Degree PD

When a company charges different prices to different consumer groups, based on age, race, etc.

Hacking

When an illegal user tries to access private information they are not entitled to access

Planning

Defining a goal, determining most effective course of action to reach that goal; Involves flexibility, as the planner must coordinate with all levels of management, and knowledge of company resources and future objectives

Post-purchase Evaluation

Depends on how well the item ends up satisfying the user's needs; Can be dissatisfaction, satisfaction, or delight

Product Costing/Valuation

Determining actual costs of products/services; includes Job Order costing, Process costing, Hybrid costing, Standard costing, Backflush costing and Activity-based costing

Marketing of Services

Different challenges arise when marketing a service, rather than a product; Major differences include tangibility, relationship and value, comparing quality, the return factor, and the idea of one versus many

Operating Activities

Direct result of business operations, such as equipment creation and sales.

Greenwashing

Disinformation from an organization claiming to be "green" through its advertising, but implementing practices that minimize positive environmental impact in actuality

Capital Structure

How a firm finances its overall operations and growth through different sources of funds; Debt comes from bond issues or notes payable, while equity is common stock, preferred stock or retained earnings

Liquidity

How easy it is to turn assets into cash.

Identity Theft

When someone possesses or uses another person's name, address, social security number, or bank information without the knowledge of the victim, with intent to commit fraud

Economic Model of Consumer Choice

Consumers make rational, economic choices, rigidly adhering to the 5 step process; the consumer allocates their limited resources to achieve the best utility for their purchase; they make use of reviews, compare benefits, and more

Organizing

Controls overall structure of the company; Without organization and structure, daily operation becomes difficult; Involves developing organizational structure and chain of command

Leading

Controls the organizing, planning and staffing activities of the company, ensures that all function together for the good of the organization; Takes place in meetings, involves communication, supervision and direction via management

Process Costing

Materials, labor and overhead costs are accumulated per production process, or production department (such as cleaning, assembly, packaging, etc.); commonly used by companies operating in mass production of identical products

Antitrust Laws

"Competition Laws", statutes developed by the government to protect consumers from predatory business practices, ensuring fair competition in an open-market economy; Predatory business practices include price fixing, price discrimination, predatory pricing

Cost of Equity

(Dividends per share divided by current market value of the stock) + growth rate of dividends; refers to the compensation the market demands in exchange for owning the asset, and bearing the risk of owning it

Business organization

A business can be organized in several ways, and the form chosen will effect the owner's and company's legal liability; Includes Sole Proprietorship, Limited Liability Company, Corporations, and Partnerships

Resource Market

A business can purchase resources to produce their goods and services

Non-profit Organization

A business given tax-exempt status, that works toward furthering a cause/purpose that could be religious, scientific, charitable, education, public safety, etc.

Generally Accepted Accounting Principles (GAAP)

A common set of accounting principles, standards and procedures that companies must follow when compiling their financial statements; A combination of authoritative standards and commonly accepted ways of recording and reporting accounting information.

Expert System

A computer system that emulates the decision making abilities of a human; Designed to solve complex problems by reasoning, through bodies of knowledge

Management Information System (MIS)

A computerized database of financial information programmed in such a way that it produces reports on operations for every level of management in a company

Marketing Plan

A document laying out the types and timing of different marketing activities

Opportunity Cost

A foregone benefit that a person could have received, but gave up to take another course of action

Patent

A government license that gives the holder exclusive rights to a process, design, or new invention for a designated period of time; Most patents are valid for 20 years

Production Possibility Frontier (PPF)

A graphical curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors (such as labor, capital, technology), that dictate where the production possibility frontier lies.

Leadership

A great leader is someone who is sociable, agreeable, emotionally stable, open to experiences and conscientious; employees favor leaders to be employee oriented with behavior

Code of Ethics

A guide of principles designed to help professionals conduct business with honesty and integrity; Outlines the mission and values of the business, how professionals are supposed to approach problems, etc.; Breaching these can result in termination; Ethics often trickle down from management (IE. if managers act ethically, then employees will too)

Anti-discrimination Laws

A law on the right of people to be treated equally. often mandated within employment, consumer transactions, and political participation; People must be dealt with on equal basis regardless of economic status, sex, age, race, ethnicity, disability, etc.

Beta

A measure of the volatility, or systematic risk of a security, or portfolio of securities in comparison to the market as a whole

Scalable systems

A model or function that has the capability to cope and perform under a growing workload

Need Recognition

A need is an essential product that one must obtain (IE. water to survive, food, etc.), while a want is a product one desires, but is not essential; Needs often arise because of problems, while wants arise because of outside influence like advertising

Tangibility

A product is tangible, the consumer can touch and see it before purchasing, decides on its worth through the packaging, design, etc.; Services are not tangible, so their benefits must be communicated through promotion, reviews, etc.

Express Warranty

A promise from the seller, promising that the item purchased will perform its function for a specific period

Trademarks

A recognizable insignia, phrase or symbol that denotes a specific product and legally differentiates it from other products; Often serves to exclusively identify a product to a specific company, and is recognition of that company's ownership of the brand

Return Factor

A service is consumed as it is offered, so it lacks the return factor that products have; This can be overcome if the seller offers money back guarantees

Market Failure

A situation in which the allocation of goods/services is not efficient, individuals or a group end up worse off than if they had not acted in rational self-interest

Group

A social community, consisting of 2+ people who have something in common

Operations Management

Administration of business practices to create the highest efficiency possible; Involves converting materials and labor into goods and services efficiently, to maximize profits

Government Agencies

Affect a wide range of social issues, including telecommunications, the financial market, racial discrimination, etc.; In total, have steadily grown in number and importance over time

Evaluation of choices

After a few options come about from info searching, one uses their needs and wants as criteria to further evaluate the possible choices; In doing so, one may find trade-offs (higher prices, etc.), in the end, the best one to satisfy needs/wants is hopefully picked

Marketing Segmentation

Aggregating prospective buyers into groups (segments) that have common needs and would respond similarly to a certain marketing action; Enables companies to target different categories of consumers who percieve the full value of certain products/services differently than others

General Partnership

All partners are personally liable for business debts, and any partner could be 100% responsible, and any partner can make decisions that affect the whole business

Information Systems

An academic study of systems with a specific reference to information, and the complementary networks of hardware and software, which people and organizations use to collect, filter, process, create and distribute data

Comparative Advantage

An economic law referring to the ability of any economic actor to produce goods and services at a lower opportunity cost than other economic actors (lower opportunity cost)

Entrepreneur

An individual who starts and runs a business with limited resources, and is responsible for all risks and rewards of their venture; Usually involves a new product or service, targeting of high returns, but with a high level of uncertainty; Originates from passion or identifying a suitable business opportunity (EX. AirBnB, KickStart)

Just in Time (JIT) system

An inventory system by which a company maintains little to no inventory, and inventories are sent by the supplier to the company exactly when they are needed.

Margin Analysis

Analyzing incremental benefit attained by increased production and flows, via breakeven analysis; used to determine price points for products/services

Labor Laws

Any law relating to the rights and responsibilities of emplyees

Mixed Economic System

Any mixture of a market and a command economic system, "Dual Economy"; generally economies with strong regulatory oversight and government control in specific areas

Money

Anything generally accepted as a medium of exchange, or form of payment

Backflush Costing

Applicable to companies that use just-in-time inventory systems. Detailed tracking of the movement of costs is eliminated, and they enter a finished goods account once they are used.

Desktop Software

Applications installed on a personal computer to support the tasks of a single user

Marketing Research

Assessing the viability of a new product through research conducted directly with the consumers, allowing the company to find its target market

Phishing

Attempts by scammers to trick users to give out personal information, such as bank account numbers or passwords

Server Farm

Provides infrastructure back to SaaS and hardware cloud efforts, and large-scale internet services

Taft-Hartley Act (1947)

Bans unfair labor union practices, in regard to union organizing efforts

Achievement Leadership

Puts high goals and training to get the needed improvement of performance; high confidence in employee abilities

Ratio Analysis

Calculates statistical relationships among data of the financial statements

Breakeven Analysis

Calculating the contribution margin on the sales mix, to determine the unit volume at which the business' gross sales would equal total expenditures.

Current Assets

Can be converted into cash within one year; Cash and its equivalents (treasury bills, certificates of deposit); Market Securities (equity and debt securities); Accounts Receivable (money owed by customers to company); Inventory (goods available for sale); Prepaid Expenses (value that has already been paid for, such as insurance, rent, advertising contracts).

Command Economic System

Characterized by a dominant, centralized power (government), that controls a large part of all economic activity, most often used in communist countries, or economies with access to large amounts of valuable resources (oil, gold)

Price Discrimination

Charging different customers different prices on the same item; Often occurs when sellers offer different prices to different groups of people; Can be first, second or third degree

Civil Rights Act (1991)

Clarifies and strengthens rules for enforcement of the anti-discrimination laws in Title VII

Efficiency Organization

Clear communication throughout an organization helps to efficiently organize labor and tasks to eliminate wasted time and effort

Supportive Leadership

Cohesion among members, attempts to reduce employee stress and frustration

Primary Info

Collected directly by the company, can be exploratory (open-ended questions, results in issues being presented that the company must address), or specific research (obtains answers to previously indentified issues, which were previously seen through exploratory)

Hierarchical Organization

Communication runs between chains of command between management and labor; Larger companies be more complex, with CEO's, CFO's, boards of directors, regional managers, etc., all of which know who they report to and who they manage; Unclear roles lead to inefficient operations, lost profits and poor communication

Horizontal Analysis

Comparing two or more years of financial date, in both dollar and percentage form

Transaction Processing System

Computer software and hardware hosting transaction-oriented applications that perform the routine transactions necessary to conduct business (Sales order entry, airline reservations, payroll, shipping, employee records)

Competitive Advantage

Conditions that allow a company to produce a good/service at lower prices or in a more desirable fashion to customers; more sales and superior margins compared to competition are seen during competitive advantage; Due to brand, cost structure, quality of offerings, intellectual property, customer support, and more

Passive Model of Consumer Choice

Consumers are more irrational, make impulse decisions; Can be easily manipulated by promotion and ads, with decisions based much more on wants, rather than needs

Cognitive Model of Consumer Choice

Consumers are thinking problem-solvers, a blend of Economic and Passive; work through the 5 steps, but not as rigid as Economic consumers

Working Capital Ratio

Current Assets divided by Current Liabilities, indicates whether a company has enough short term assets to cover its short term debt (anything below indicates negative W/C, or working capital; Over 2 means the firm has excess assets that could be invested, anywhere between 1.2-2.0 is efficient)

Activity-based Costing

Costs are accumulated per activity (ordering, processing, assembly, packaging, maintenance), and are allocated using different drivers such as the number of orders, processing time, floor space, etc.

Job Order Costing

Costs are accumulated per job (Job 101, 102, 103, etc.), used by firms with limited quantities of products, and often used for unique products such as custom furniture, dressed, buildings, etc.; Calculates the cost of a unit (or set of units) in a given order

Tort Law

Covers most civil lawsuits, constitutes for most claims in civil court (other than contractual disputes); Exists to provide relief from wrongful acts of others, typically through monetary compensation; Three types of Torts are Negligent, Intentional, and Strict Liability

Cooperative Organization

Coworkers must be able to communicate effectively to cooperate; Tasks are delegated to different individuals to get everything done with max efficiency

Intellectual Property (IP)

Creations of the mind, such as inventions, literary and artistic works, designs, symbols, names etc. used in commerce; IP is protect in law by patents, copyright and trademarks, allowing people to earn recognition and financial benefit from their creations

Secondary Info

Data an outside entity has already gathered, such as U.S Census data, trade reports, etc.

Data Marts

Databases focused on addressing concerns of a specific problem, or business unit

Value-Based code

Deals with a company's core value system, discussed responsible conduct as it relates to the large public good and the environment; Often requires greater degree of self-regulation, rather than compliance based codes

Vertical analysis

Each category of accounts on the balance sheet is shown as a percentage of the total account

Cost of Debt

Effective rate a company pays on current debt, through use of bonds, loans and borrowings

Negligent Torts

Encompass harm done to people through the failure of another to exercise caution or care; Accidents (Christian Millare death, Quest/Athena Diagnostics)

Controlling

Ensures that all functions are in place and operating successfully; Involves establishing performance standards, monitoring employee output, and helps identify problems

Working Capital

Equal to Current Assets minus Current Liabilities, the measure of a company's efficiency and short-term financial health; if current assets do not exceed current liabilities, it may run into trouble paying creditors back in the short term, with the worst case scenario of bankruptcy; declining working capital ratio over a long period is a red flag

Occupational Safety and Health Act

Establishes general safety standards, and standards for specific industries; Requires employers to record and report workplace accidents, and lays out rules for federal workplace inspections, and penalties for any violations

Cost-benefit analysis

Evaluating all potential costs and revenues that could be generated when a project is completed, the outcome of the analysis will determine whether the project is financially feasible, or if another should be pursued; Generally only sufficient for short-term projects, tends to fail for large projects, as it does not take inflation, interest rates and the present value of money into account.

Capital Budgeting

Examining proposal, deciding if products/services are needed, and finding the right way to finance the purchase; outlines payback periods so that management is able to anticipate future economic benefits; using net present value and internal rate of return to assist decision makers on whether to make a capital intensive project of service.

Statement of Retained Earnings

Financial Statement outlining the changes in retained earnings over a specific period. Prepared in accordance to GAAP; Uses net income, and info from other financial statements to reconcile beginning and ending retained earnings for the period; used to analyze the health of the organization and improve market/investor confidence in the organization.

DDos Attack

Flooding a network or web server with thousands of phony communications or requests, in order to crash the network

Traditional Economic System

Focuses exclusively on goods/services directly related to the systems' beliefs, customs and traditions; relies on individuals, does not show a degree of specialization or division of labor (the most basic, ancient type)

Human Resource Management (HRM)

Focuses on recruitment, management, and providing direction to emplyees; HRM members provide knowledge, tools, training, coaching and legal advice that the organization needs for successful operation; Also work to protect the company safe from lawsuits of discrimination, workplace chaos, etc.

Strict Liability Torts

Focuses on the act done itself, rather than the responsibility of the person; The company is responsible for the person's wrongdoings (Google self-driving car crash)

Communication

For a group of people to be an organization rather than a group of individuals, they must communicate and coordinate their activities

Direct Quotation

Foreign currency is expressed in terms of the domestic currency

Cross Cultural Management

Functions include recruiting candidates that can be effective in cross-cultural environments, handling differing regulatory environments for businesses, training employees to handle intercultural communication issues, facilitating cross cultural teams, and aligning HR policies across entities in different nations

Rate of Return

Gain or loss on an investment over a specified time period, expressed as a percentage of the investment's total cost; ((Current Price - Original Price) / Original Price) x 100

Government Markets

Goods and services are purchased by government agencies at all levels, to carry out their functions

Institutional Markets

Goods and services are purchased by schools, hospitals, universities etc. to benefit persons cared for within the institution

Industrial Markets

Goods and services are purchased in order to produce other goods and services

Reseller Markets

Goods and services are purchased to simply resell to everyday consumers

Layers of a Computer System

Hardware, OS, Application, User (bottom-to-top)

Intentional Torts

Harms done to people intentionally, by the willful misconduct of another; Such as assault, fraud or theft (Gawker and Hulk Hogan)

Quality of Life

Highly subjective measure of happiness that is an important component of many financial decisions, with factors such as financial security, job satisfaction, family life, health, safety, and more

Application Server

Houses and serves business logic for use by multiple applications (MS Word)

Activity Based Costing

Identifies the activities a firm performs, and assigns indirect costs to products, used in target and product costing; recognizes the relationship between costs, activities and products; An activity can also be considered as any transaction or event that is a cost drive; Transaction drivers involve how many times an activity occurs, and duration drivers measure how long an activity takes to complete.

Managerial Accounting

Identifying, measuring, analyzing, interpreting and communicating information for the pursuit of an organization's goals; with the goal of helping managers of the organization make decisions. Involves Margin Analysis, Constraint Analysis, Capital Budgeting, Trend Analysis and Forecasting, and Product Costing/Valuation

Predatory Pricing

Illegal under antitrust laws, the act of setting prices incredibly low to drive out competition

Three Financial Statements

Income Statement, Balance Sheet, and Statement of Cash Flows; provide investors with information about the state of a company's affairs; (Only Income Statement provides overview of sales and net income).

Organizational Market

Individuals and companies who purchase goods/services for something other than personal consumption; Fewer buyers purchase in greater amounts; Consists of Industrial, Reseller, Government and Institutional Markets; segmented by Geographic Location, Business Description, Behavioral/Operating Practices, and Culture/Personality

Knowledge

Insight derived from experience and expertise

Effective Management

Involves creative problem solving, motivating employees, ensuring that the organization achieves objectives and goals; Involves the four functions of Planning, Organizing, Leading and Controlling (POLC)

Managing Diversity

It is important for a workforce to be both diverse and qualified, diversity should be encouraged when creating teams, complaints of discrimination/favoritism should be taken seriously, regular trainings about diversity's importance should be implemented

Accrual Accounting

Measures the performance and position of a company by recognizing economic events regardless of when transactions occur, allowing current cash in/outflows to be combined with future expected in/outflows to give an accurate picture of the current financial condition of the company; generally the standard accounting practice, except for smaller companies; OPPOSITE of cash accounting

Perfect Competition (Market Structure)

Large number of small firms compete against one another; all firms maximize profits, there is free entry and exit, all firms sell identical goods, and customers have no preference (Stock Market)

Monopolistic Competition (Market Structure)

Large number of small firms compete, but they sell slightly differentiated products; all firms maximize profits, there is free entry and exit, firms sell differentiated products, and consumers may prefer some products (Cereals)

Enterprise Systems (ES)

Large scale application software packages that support business processes, the flow of information, reporting, data analytics and much more

Wagner Act (1935)

Lays out the framework for union organizing activities, identifies and bans unfair management practices in regard to unionization

Assets

Listed from top to bottom in order of their liquidity. Divided into current assets and long-term assets.

Exogenous

Long-term growth is determined by factors external to the economy

Endogenous

Long-term growth is determined by factors within the economy

Total Quality Management (TQM)

Management approach to long-term success through customer satisfaction; All members of an organization must work to improve processes, products, services and the culture in which they work; TQM must be customer focused, involve employees totally, be process centered, integrated into everything they do, strategic and systematic, improve continually, be fact based, and involve communication

Feedback Organization

Managers jobs are made easier when they have access to a stream of info from their employees, as their feedback is a vital info source; Positive and Negative feedback should be sought from the front lines of production to constantly imporve efficiency and productivity

Autocratic Leadership

Managers retain as much power and decision making authority as possible, with no staff involvement

Constraint Analysis

Managing constraints within a production line, or sales process.

Consumer Market

Markets dominated by products and services offered for general consumers, segmented by geographic location, demographics, psychographics, benefits sought, or consumer behavior

Shareholder Equity

Money attributable to a business' owners/shareholders. Known as "Net Assets", as it is equivalent to the total assets of a company, less its liabilities. Includes Treasury Stock (stock a company has repurchased or never issued, to be sold at a later date); Preferred Stock (listed separately from common stock under shareholder equity, assigned arbitrary par value); Additional Paid in Capital ("capital surplus", the amount shareholders have invested in excess of "common" or "preferred" stock accounts, based on par value rather than market price)

Liabilities

Money that a company owes to outside parties, from bills to pay to suppliers, intrest on bonds issued to creditors, utilities, salaries.

Supply & Demand

Most important concept in microeconomics, helps understand how and why transactions in markets take place, and how prices are determined; Consumers are willing to buy more if prices fall, so they are represented by a downward sloping demand curve; Producers are willing to sell less as prices fall, so they can be represented by an upward sloping curve; The intersection of the curves is called the Market Equilibrium, which determines equilibrium prices and quantity

Income

Most significant factor in measuring economic performance, gross domestic product (GDP) is the most commonly used measure

Purchase Process

Need Recognition, Information Search, Evaluation of Choices, Purchase, and Post-purchase Evaluation

5 Step Purchase Process

Need recognition, Information Search, Evaluation of Alternatives, Purchase Decision, Post-purchase Behavior

Non-Operating Activities

Not directly related operations, such as selling investment securities, or real estate.

Legacy Systems

Older information systems that are often incompatible with other systems and technologies

International accounting Standards (IAS)

Older standards stating how particular transactions and events should be reflected in financial statements; previously issued by the Board of International Accounting Standards Committee (IASC); but since 2001 the new standards have been known as International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).

Income Statement

One of the three major financial statements in the annual report, and 10-K. Financial statement that reports a company's financial performance across a CERTAIN TIME PERIOD; Assessed through a summary of how the business incurs its revenues and expenses, through both operating and non-operating activities. It concludes with its net profit (or loss), and earnings per share. Used to calculate financial rations, such as return on equity (ROE), return on assets (ROA), gross profit, operating profit, earnings before interest in taxes (EBIT), as well as year over year (YOY) and quarter over quarter (QOQ) performance.

Retained Earnings

Profits an organization keeps for internal use (aka retained profit, accumulated earnings), often used to pay debt obligations, or reinvested for company growth.

Statement of Cash Flows

One of the three major financial statements in the annual report, and 10-K. Provides aggregate data regarding all cash inflows a company receives from ongoing operations and external investment sources, and cash outflows that pay for business activities and investments. Listed in order of Cash Flows from Operations (business activities), Investing (cash spent on property, plant, equipment), and Financing (overview of cash used in business financing).

Balance Sheet

One of the three major financial statements in the annual report, and 10-K. Summarizes a company's assets, liabilities, shareholder equity at a SPECIFIC POINT IN TIME; these 3 segments give investors an idea as to what the company owns and owes, and how much is invested by shareholders. Assets=Liability+SH Equity Named due to assets and liabilities + equity must balance to the same amount.

Limited Partnership (LP)

One partner is responsible for decision making, can be held responsible for business debts; The other partner merely invests in the business, but each partner is liable to their invested capital only

Marketing Strategy

Overall game plan for reaching people, making a connection, and turning them into customers of the product or service offered; Contains the company's value proposition, key marketing messages, info on the target customer, and more, informs the marketing plan; Has a longer lifespan than any individual marketing plan

Demographic Segmentation

Segmenting based on population characteristics such as age, occupation, marital status, gender, etc.

Behavioral Segmentation

Segmenting based on the relationships people have with either the product or the firm, such as whether the users are regular or occasional customers, how loyal they are to a brand (or if they switch), etc.

Comparing of Quality

Quality of service is difficult to measure, as it is typically measurable once it has already been performed, rather than before the purchase is made

Data

Raw facts and figures

Financial Accounting

Recording, summarizing and reporting the transactions of business operations over a period of time; summarized in preparation of the three major financial statements, which encapsulate the company's overall operating performance over a specific period; with the goal of providing info to parties outside the organization.

Cash Accounting

Records payment receipts when they are received, and expenses when they are paid. Does not provide an accurate picture of liabilities that have been incurred but not yet been paid for, suggesting that the company is better off than it actually is.

Market Economic System

Relies on free markets and does not allow any kind of government involvement, the gov't only controls relevant economic segments; the entire system is regulated by the people and the law of supply and demand

Fair Labor Standards Act (1938)

Requires employers to pay a federal minimum wage to non-exempt workers, and to pay overtime

Equal Pay At (1963)

Requires employers to pay men and women equally for doing substantially the same work, unless differences of pay are based on merit, quality of production, etc.

Financial Statement Analysis

Reviewing and evaluating a company's financial statements to understand financial health of the company, enabling more effective decision making; done through either Horizontal or Vertical analysis, or Ratio analysis; each financial statement provides multiple years of data, so performance can be tracked and the future can be somewhat predicted

Trend Analysis/Forecasting

Reviewing trends for certain costs and investigating unusual deviations; also utilizes previous periods' information to calculate future financial info (historical pricing, sales volumes, geographical locations)

Info Search

Searching for and gathering information on potential products; Info can come from print, radio, tv, internet ads, reviews, or opinions of friends and family

Culture/Personality Segmentation

Segmentation based on how the organization is managed, and the personality of the management personnel

Behavioral/Operating Practice Segmentation

Segmentation based on how the organization makes its purchases

Business Description Segmentation

Segmentation based on what sort of business it is, and where it fits into its industry

Geographic Location Segmentation

Segmentation based on where the organization operates

Absolute Advantage

The ability to produce more/better goods and services than somebody else (greater volume)

Purchase

The actual purchasing of the product; The choice of purchase method can vary by what options the store offers, such as financing, or when the product is available, or how fast the delivery will be

Scarcity

The basic economic problem, the gap between limited (scarce) resources and limitless wants; "Unlimited human wants/needs in a world of limited resources

Sole Proprietorship

The business has a sole owner, and the business is not distinguished from the person; All profits, losses, assets and liabilities are the sole responsibility of the owner; Not ideal for high-risk businesses

Weighted Average Cost of Capital (WACC)

The calculation of a firm's cost capital, in which each category is proportionately weighted, including common stock, preferred stock, bonds, long-term debt

Risk

The chance that an investment's return will be different than expected, a possibility of losing some, or all of the original investment; Low risk = low return and vice versa

Cost of Capital

The cost of funds used for financing a business; refers to Cost of Equity if financed through equity, and Cost of Debt if financed through debt, but most companies use a combination of both wherein cost is derived from a weighted average of capital sources

Product Life Cycle

The course of events that brings a new product into existence, following its growth into a mature product, into eventual decline

Spoofing

The creation of a fake website geared toward collecting the personal information of those who happen to access it

Marketing Mix

The different choices organizations make during the process of bringing a product or service into the market; OFten described by the 4 P's (Product, Place, Price, and Promotion)

Decline Phase

The final phase, where the product has passed its highest demand point, and demand either remains steady or declines as other products begin to make it obsolete

Introduction Phase

The first step, involving initial release of the product, often with high levels of advertising

Social Graph

The global mapping of users, organizations, and how they are connected

Agency Law

The relationship between a person (or agent) that acts on behalf of another person, company or government (principal or master); Agency is formed when the principal asks an individual to make a delivery, or names someone as an agent through a contract, leading to the responsibility of the principal for actions made by the agent; Often enforced by written agreements made through the power of an attorney

Implied Warranty

The retailer implies that the item will work properly and be of an average grade/quality, as long as it is used for its intended purpose

Growth Phase

The second phase, as sales begin to accelerate, with increasing sales year by year; Gross margins steadily decline, and the product becomes less profitable on the per-unit level; Increased competition is likely

Software

The set of instructions for a computer and its hardware to perform its specific operations

Organizational Behavior

The study of both group and individual performance within an organization; Examines human behavior in a work environment to determine its impact on job structure, performance, communication, leadership, etc.

Aggregate Demand

The sum of all final goods and services produced in an economy, expressed as total money exchanged for said goods and services

Maturity Phase

The third phase, as the product reaches the upper level of its demand cycle, advertising begins to have less and less effect on demand

GDP per Capita

The total output of a country that takes GDP and divides by the number of people in the country; useful in comparing one country to another; works well to indicate a country's economic performance, or productivity of the workforce

Cost Driver

The unit of an activity that causes the change in an activity's cost

Hybrid Costing

The use of both job order and process costing at the same time, often used for labor and factory overhead.

Aggregate Supply

Total output, the total supply of goods and services produced within an economy at a given price level, within a time period; It is represented by the aggregate suppply curve, describing the relationship between prices levels and the output quantity that firms will provide

4 Economic Systems

Traditional, Command, Market, and Mixed economic systems

URL

Uniform Resource Locator

Standard Costing

Used along with job order or process costing; estimated costs based on pre-determined values are used even if actual costs are not yet available, and these estimated costs are adjusted later to reflect the effect of actual incurred costs

Cloud Computing

Using a network of remote servers hosted on the internet to store, manage and process data

Data Mining

Using computers to identify hidden patterns and to build models from larger data sets

Platform As a Service

Utility computing in which vendors provide the operating system and supporting software, but clients write their own code

Top-Down Approach

Valuation approach, begins with analyzing the overall economy, going down to specific analysis; Allows investors to make informed decisions based on understanding the economy and how it relates to the stock; Incredibly useful in valuating world stocks

Trojans

Viruses sent in disguise as friendly programs that attempt to reach a user's personal information

Malicious Software (Malware)

Viruses sent through the internet to infect a user's computer, often disabling systems or crashing the system; Once installed into the hard drive, the virus can spread easily and infect more parts of the computer, which leads to loss of data, clogging memory, slowing down of the system, etc.

Product

What needs the product satisfies, what features it has (or currently lacks), how the customer will use it, what it looks like (size, color, shape, etc.), what it will be called, how it is branded, how it differentiates from competitors, etc.

Price

What the value of the product is to the buyer, whether or not established price points exist, will discounts be offered, how the price compares to competitors