operations and financial management

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general expenses

Administrative expenses of the firm such as office salaries, insurance, and rent, utilities, and depreciation

gross profit(gross margin)

How much a firm earned by buying (or making) and selling merchandise

net income

Money leftover after deducting all expenses

depreciation

Systematic write-off of the cost of a tangible asset over its estimated useful life

selling expenses

The marketing and distribution of the firm's goods or services, such as advertising, salespeople's salaries, advertising, and supplies

production management

all activities managers do to help their firms create goods

fixed assets

assets that are relatively permanent such as land/buildings/equipment

investments

case used in or provided by the firm's investment activities

financing

cash raised by taking on new debt, or equity capital o chase used to pay business expenses, past debt, or company dividends

operations

cash transaction associated with running the business

costs of goods sold

cost of raw materials and supplies used for producing items for resale

operating expenses

costs involved in operating a business and includes selling and general

production

creation of finished goods/services using the factors of production

cash budget

estimates cash inflows and outflows during a particular period like a month or quarter

income statement

financial statement showing a firm's profit after costs/expenses/taxes

balance sheet

financial statement that reports a firm's financial condition at a specific time; assets, liabilities, and owners equity

statement of cash flows

financial statement that reports cash receipts and disbursements related to a firm's 3 major activities: operations, investments, financing

finance

function of business that acquires funds for the firm and manages the funds within the firm

debt financing

funds raised through various forms of borrowing that must be repaid

capital budget

highlights a firm's spending plans for major asset purchases that often require large sums of money

current assets

items that can/will be converted into cash within 1 year

financial management

job of managing the firm's resources so it can meet its goals/objectives

assets equation

liabilities + owner's equity

continuous process

long production runs turn out finished products over time

intangible assets

long-term assets that have no physical form but do have value (patents & copyrights)

revenue

monetary value of what a firm received for goods sold/services rendered/& other payments

equity financing

money raised from within the firm from operations/through the sales of ownership in the firm (stock/venture capital)

financial control

process in which a firm periodically compares its actual revenues/costs/expenses within its budget

intermittent process

production run is short and the machines are changed frequently to make different products

budget

sets forth management's expectations and allocates the use of specific resources throughout the firm

operations management

specialized area in management that converts/transforms resources into goods/services

financial statement

summary of all the transactions that have occurred over a particular period

equity

the owner's claims to the assets of the business; after taking out the liabilities

operating(master) budget

ties together all the firm's other budgets and summarizes its proposed financial activities

Liabilities

what the business owes to others


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