Intro To Business Final

retailer

-A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier, who normally sell their goods to another business.

balance sheet

-A condensed statement that shows the financial position of an entity on a specified date (usually the last day of an accounting period). -a balance sheet states (1) what assets the entity owns, (2) how it paid for them, (3) what it owes (its liabilities), and (4) what is the amount left after satisfying the liabilities. -Balance sheet data is based on a fundamental accounting equation (assets = liabilities + owners' equity), and is classified under subheadings such as current assets, fixed assets, current liabilities, Long-term Liabilities.

"S" Corporation

-A corporation that has made an election to be an "S" Corporation for federal income tax purposes is treated as a partnership for tax purposes, although it is treated as a regular corporation for other purposes.

Federal Deposit Insurance Corporation (FDIC)

-A federal agency that provides insurance on funds deposited with banks and thrift institutions. Established in 1933 for the purpose of instilling confidence in the nation's banking system, the FDIC insures deposits for up to $100,000 per account-holder per financial institution. It was created by the Banking Act of 1933.

total quality management (TQM)

-A holistic approach to long-term success that views continuous improvement in all aspects of an organization as a process and not as a short-term goal. It aims to radically transform the organization through progressive changes in the attitudes, practices, structures, and systems. -Total quality management transcends the product quality approach, involves everyone in the organization, and encompasses its every function: administration, communications, distribution, manufacturing, marketing, planning, training, etc.

limited liability company (LLC)

-A limited liability company provides limited liability for all of its members, but typically can be treated as a partnership for federal income tax purposes. State laws may differ as to whether it is treated as a partnership or a corporation for state income tax purposes. It can be managed by all of the members or can have centralized management in one or more of the members

consumer price index (CPI)

-A measure of changes in the purchasing-power of a currency and the rate of inflation. -expresses the current prices of a basket of goods and services in terms of the prices during the same period in a previous year, to show effect of inflation on purchasing power. -one of the best known lagging indicators.

marketing mix

-A planned mix of the controllable elements of a product's marketing plan commonly termed as 4Ps: product, price, place, and promotion. These four elements are adjusted until the right combination is found that serves the needs of the product's customers, while generating optimum income. Sometimes the first P (Product) is substituted by presentation.

franchise

-A right conferred or established by a government, such as the right to vote (exercise one's franchise) in a local or national election. -Commerce: (1) A privilege granted to make or market a good or service under a patented process or trademarked name. (2) A business operating under such privilege.

market niche

-A small but profitable segment of a market suitable for focused attention by a marketer. -Market niches do not exist by themselves, but are created by identifying needs or wants that are not being addressed by competitors, and by offering products that satisfy them.

income statement

-A summary of a management's performance as reflected in the profitability (or lack of it) of an organization over a certain period. It itemizes the revenues and expenses of past that led to the current profit or loss, and indicates what may be done to improve the results. -depicts what happened over a month, quarter, or year. It is based on a fundamental accounting equation (Income = Revenue - Expenses) and shows the rate at which the owners equity is changing for better or worse. -forms the basic set of financial information required to manage an organization.

cash flow statement

-A summary of the actual or anticipated incomings and outgoings of cash in a firm over an accounting period (month, quarter, year) -This section represents after-tax net income plus depreciation and amortization and, therefore, the ability of the firm to service its debt and pay dividends. -constitutes the critical set of financial information required to manage a business.

strategic planning

-A systematic process of envisioning a desired future, and translating this vision into broadly defined goals or objectives and a sequence of steps to achieve them -begins with the desired-end and works backward to the current status. -At every stage of long-range planning the planner asks, "What must be done here to reach the next (higher) stage?" -At every stage of strategic-planning the planner asks, "What must be done at the previous (lower) stage to reach here?" -looks at the wider picture and is flexible in choice of its means

contract

-A voluntary, deliberate, and legally binding agreement between two or more competent parties. -usually written but may be spoken or implied, and generally have to do with employment, sale or lease, or tenancy. -Contracts are normally enforceable whether or not in a written form, although a written contract protects all parties to it. Some contracts, (such as for sale of real property, installment plans, or insurance policies) must be in writing to be legally binding and enforceable. Other contracts (see implied in fact contract and implied in law contract) are assumed in, and enforced by, law whether or not the involved parties desired to enter into a contract.

mission statement

-A written declaration of an organization's core purpose and focus that normally remains unchanged over time. Properly crafted mission statements (1) serve as filters to separate what is important from what is not, (2) clearly state which markets will be served and how, and (3) communicate a sense of intended direction to the entire organization. -A mission is different from a vision in that the former is the cause and the latter is the effect; a mission is something to be accomplished whereas a vision is something to be pursued for that accomplishment. Also called company mission, corporate mission, or corporate purpose

code of ethics

-A written set of guidelines issued by an organization to its workers and management to help them conduct their actions in accordance with its primary values and ethical standards.

product placement

-An advertising technique used by companies to subtly promote their products through a non-traditional advertising technique, usually through appearances in film, television, or other media. -Product placements are often initiated through an agreement between a product manufacturer and the media company in which the media company receives economic benefit. -A company will often pay a fee to have their product used, displayed, or significantly featured in a movie or show.

generally accepted accounting principles (GAAP)

-Authoritative rules, practices, and conventions meant to provide both broad guidelines and detailed procedures for preparing financial statements and handling specific accounting situations. -provide objective standards for judging and comparing financial data and its presentation, and limit the directors' freedom in showing an unrealistic picture through creative accounting. -An auditor must certify that the provisions of GAAP have been followed in reporting an organization's financial data in order it to be accepted by investors, lenders, and tax authorities. -Most developed countries (Canada, India, Japan, UK, US, etc.) have their own GAAP which may differ from those of others in minor or major details.

non-verbal communication

-Behavior and elements of speech aside from the words themselves that transmit meaning. -includes pitch, speed, tone and volume of voice, gestures and facial expressions, body posture, stance, and proximity to the listener, eye movements and contact, and dress and appearance.

loss

-General: Unrecoverable and usually unanticipated and non-recurring removal of, or decrease in, an asset or resource. -Accounting: (1) cost that produces no benefit, (2) decrease in value, (3) excess of expenditure over income, (4) excess of cost over the net proceeds from a transaction.

fiscal policy

-Government's revenue (taxation) and spending policy designed to (1) counter economic cycles in order to achieve lower unemployment, (2) achieve low or no inflation, and (3) achieve sustained but controllable economic growth.

expenses

-Money spent or cost incurred in an organization's efforts to generate revenue, representing the cost of doing business. -may be in the form of actual cash payments (such as wages and salaries), a computed expired portion (depreciation) of an asset, or an amount taken out of earnings (such as bad debts). Expenses are summarized and charged in the income statement as deductions from the income before assessing income tax. -Whereas all expenses are costs, not all costs (such as those incurred in acquisition of income generating assets) are expenses.

5 P's of Marketing

-Product -Place -Price -Promotion -Presentation

imports

-Products of foreign origin brought into a country

retained earnings

-Profits generated by a company that are not distributed to stockholders (shareholders) as dividends but are either reinvested in the business or kept as a reserve for specific objectives (such as to pay off a debt or purchase a capital asset). -A balance sheet figure shown under the heading retained earnings is the sum of all profits retained since the company's inception. -reduced by losses, and are also called accumulated earnings, accumulated profit, accumulated income, accumulated surplus, earned surplus, undistributed earnings, or undivided profits.

marketing research

-Scientific discovery methods applied to marketing decision making. It generally comprises of (1) Market research: identification of a specific market and measurement of its size and other characteristics. (2) Product research: identification of a need or want and the characteristic of the good or service that will satisfy it. (3) Consumer research: identification of the preferences, motivations, and buying behavior of the targeted customer. Information for marketing research is collected from direct observation of the consumers (such as in retail stores), mail surveys, telephone or face-to-face interviews, and from published sources (such as demographic data).

business plan

-Set of documents prepared by a firm's management to summarize its operational and financial objectives for the near future (usually one to three years) and to show how they will be achieved. -serves as a blueprint to guide the firm's policies and strategies, and is continually modified as conditions change and new opportunities and/or threats emerge. When prepared for external audience (lenders, prospective investors) it details the past, present, and forecasted performance of the firm. And usually also contains pro-forma balance sheet, income statement, and cash flow statement, to illustrate how the financing being sought will affect the firm's financial position.

entrepreneur

-Someone who exercises initiative by organizing a venture to take benefit of an opportunity and, as the decision maker, decides what, how, and how much of a good or service will be produced. -supplies risk capital as a risk taker, and monitors and controls the business activities. The entrepreneur is usually a sole proprietor, a partner, or the one who owns the majority of shares in an incorporated venture.

asset

-Something valuable that an entity owns, benefits from, or has use of, in generating income. -Accounting: Something that an entity has acquired or purchased, and that has money value (its cost, book value, market value, or residual value). -can be (1) something physical, such as cash, machinery, inventory, land and building, (2) an enforceable claim against others, such as accounts receivable, (3) right, such as copyright, patent, trademark, or (4) an assumption, such as goodwill. Assets shown on their owner's balance sheet are usually classified according to the ease with which they can be converted into cash.

owners' equity

-The capital employed in a company, computed by deducting the book value of the liabilities from the book value of the assets. -Also called net assets, net worth, shareholders' equity, or shareholders' funds.

corporate philanthropy

-The charitable donations of profits and resources given by corporations to nonprofit organizations. -Corporate philanthropy generally consists of cash donations but can also be in the form of use of their facilities or volunteer time offered by the company's employees. -Donations are generally handled directly by the corporation or by a foundation created by the firm.

social responsiblity

-The obligation of an organization's management towards the welfare and interests of the society in which it operates.

human resources management (HRM)

-The process of hiring and developing employees so that they become more valuable to the organization. -includes conducting job analyses, planning personnel needs, recruiting the right people for the job, orienting and training, managing wages and salaries, providing benefits and incentives, evaluating performance, resolving disputes, and communicating with all employees at all levels.

teamwork

-The process of working collaboratively with a group of people in order to achieve a goal. -Teamwork is often a crucial part of a business, as it is often necessary for colleagues to work well together, trying their best in any circumstance. -Teamwork means that people will try to cooperate, using their individual skills and providing constructive feedback, despite any personal conflict between individuals.

public relations

-The profession or practice of creating and maintaining goodwill of an organization's various publics (customers, employees, investors, suppliers, etc.), usually through publicity and other nonpaid forms of communication. -These efforts may also include support of arts, charitable causes, education, sporting events, and other civic engagements.

technology

-The purposeful application of information in the design, production, and utilization of goods and services, and in the organization of human activities. -Tangible: blueprints, models, operating manuals, prototypes. -Intangible: consultancy, problem-solving, and training methods. -High: entirely or almost entirely automated and intelligent technology that manipulates ever finer matter and ever powerful forces. -Intermediate: semiautomated partially intelligent technology that manipulates refined matter and medium level forces. -Low: labor-intensive technology that manipulates only coarse or gross matter and weaker forces.

profit

-The surplus remaining after total costs are deducted from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an enterprise.

gross domestic product (GDP)

-The value of a country's overall output of goods and services (typically during one fiscal year) at market prices, excluding net income from abroad. -Gross Domestic Product (GDP) can be estimated in three ways which, in theory, should yield identical figures. They are -(1) Expenditure basis: how much money was spent, -(2) Output basis: how many goods and services were sold, and -(3) Income basis: how much income (profit) was earned. -These estimates, published quarterly, are constantly revised to approach greater accuracy. The most closely watched data is the period to period change in output and consumption, in real (inflation adjusted) terms.

export

-To send goods or services across national borders for the purpose of selling and realizing foreign exchange

angel investor

-a former entrepreneur or professional who provides starting or growth capital in promising ventures, and helps also with advice and contacts. -Unlike venture capitalists, angel investors usually operate alone (or in very small groups) and play only an indirect role as advisors in the operations of the investee firm. They are deemed to be 'angels' in comparison with grasping investors who are termed 'vulture capitalists.' Also called business angel.

ethics

-a set of beliefs about right and wrong, good and bad

Expectancy Theory

-a worker will be motivated if he/she believes that effort will lead to performance and performance will lead to a reward

interrelationships

-connections between multiple people or groups or parts of a system among other people, people or groups

limited partnership

-each of the general partners has unlimited liability for the debts of the partnership, but the limited partner's exposure to the debts of the partnership is limited to the contribution each has made to the partnership. With certain minor exceptions, the reporting for tax purposes is the same as for a general partnership.

general partnership

-each of the two or more partners will have unlimited liability for the debts of the business. The income and expense is reported on a separate return for tax purposes, but each partner then reports his or her pro-rata share of the profit or loss from the business as one line on his personal tax return.

sustainable development

-economic development characterized by low growth rate, absence of pollution, and greatly diminished environment impact. -Described by the Brundtland report as the "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs."

autocratic leadership

-hoard decision -making power for themselves

natural resources

-land, fresh water, wind and mineral deposits

bankruptcy

-legal procedure for liquidating a business (or property owned by an individual) which cannot fully pay its debts out of its current assets. -can be brought upon itself by an insolvent debtor (called 'voluntary bankruptcy') or it can be forced on court orders issued on creditors' petition (called 'involuntary bankruptcy'). -Two major objectives of a bankruptcy are (1) fair settlement of the legal claims of the creditors through an equitable distribution of debtor's assets, and (2) to provide the debtor an opportunity for fresh start. Bankruptcy amounts to a business-failure, but voluntary winding up does not.

capital

-machines, tools, buildings, information and technology

factors of production

-natural resources -capital -human resources -entrepreneurship

sole proprietorship

-one person alone. He or she will have unlimited liability for all debts of the business, and the income or loss from the business will be reported on his or her personal income tax return along with all other income and expense he or she normally reports (although it will be on a separate schedule). -many start businesses this way because they are unfamiliar with the other forms of organizations

entrepreneurship

-people who take the risk of launching and operating their own business -sees opportunities when others don't -uses their own resources to capitalize on that potential

Equity Theory

-perceptions of fairness directly affect worker motivation

wholesaler

-person or firm that buys large quantity of goods from various producers or vendors, warehouses them, and resells to retailers. Wholesalers who carry only non-competing goods or lines are called distributors.

human resources

-physical, intellectual and creative contributions of everyone who works within the economy

Maslow's Hierach of Needs of Theory

-physiological, safety, social, esteem

corporation

-provides limited liability for the investors. Except as indicated below, none of the shareholders in a corporation is obligated for the debts of the corporation; creditors can look only to the corporation's assets for payment. The corporation files its own tax return and pays taxes on its income. If the corporation distributes some of its earnings in the form of dividends, it does not deduct the dividend in computing its taxes, but the shareholder recipients must pay taxes on those dividends even though the corporation has paid taxes on its earnings. A corporation has some tax benefits such as deductibility of health insurance premiums.

free rein

-set objectives for their followers but give them freedom to choose how they accomplish these goals

democratic leadership

-share power with their followers

breakeven analysis

-study of the mathematical relationship between costs and sales revenue, under a given set of assumptions regarding the firm's fixed costs and variable costs. -the objective is to determine (in manufacturing) number of products that must be sold at a given price to cover the costs, or (in project financing) number of months or years required by the forecasted total net cash flow to equal estimated total project cost. -An integral part of financial planning, it is performed either by using a breakeven-formula or by drawing a breakeven graph.

supply and demand

-the amount of a product which is available and the amount which is wanted by customers

universal ethical standards

-trustworthiness -respect -responsibility -fairness -caring -citizenship

net worth

-value of a firm to its owners (stockholders/shareholders) as shown on its balance sheet. It is the sum of the issued share capital, retained earnings, and capital gains. Also called net value.

ethical dilemma

-when values are in conflict -when whatever you do will have negative consequences, forcing you to choose among bad options

Theory Y

-work is natural as play and rest -workers do not inherently dislike it

Theory X

-workers dislike work and will do everything to avoid it

liability

1. Finance: A claim against the assets, or legal obligations of a person or organization, arising out of past or current transactions or actions. -require mandatory transfer of assets, or provision of services, at specified dates or in determinable future. 2. Accounting: Accounts and wages payable, accrued rent and taxes, trade debt, and short and long-term loans. Owners' equity is also termed a liability because it is an obligation of the company to its owners. Liabilities are entered on the right-hand of the page in a double-entry bookkeeping system.

promotion

1. Marketing: The advancement of a product, idea, or point of view through publicity and/or advertising. See also sales promotion. 2. Human Resources: The advancement of an employee's position within the organization.

income

1. The flow of cash or cash-equivalents received from work (wage or salary), capital (interest or profit), or land (rent). 2. Accounting: (1) An excess of revenue over expenses for an accounting period. Also called earnings or gross profit. (2) An amount by which total assets increase in an accounting period. 3. Economics: Consumption that, at the end of a period, will leave an individual with the same amount of goods (and the expectations of future goods) as at the beginning of that period. Therefore, income means the maximum amount an individual can spend during a period without being any worse off. Income (and not the GDP) is the engine that drives an economy because only it can create demand.