Praxis II Business Education 2 (business)

Created by kjreda 

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I created this set from other sets I found in quizlet as well as adding terms that I thought were important. I also utilized web resources such as Khan Academy as part of my study process

Entrepreneur

someone who is willing to assume the responsibility, risk and rewards of starting and operating a business

Personal Strength

Some thing that you can do well

Personal Trait

a quality or characteristic that you have

Advertising

..., the business of drawing public attention to goods and services

Information Technology

..., the use of technology to move and process information

Target Marketing

..., focusing all marketing decisions on a very specific group of people who you want to reach.

Administration

..., the management of any office, business, or organization; direction.

Parent Company

A company that controls or owns another company or companies.

Brand

name, symbol, or design used to identify a product.

Brand Loyalty

a favorable attitude toward and consistent purchase of a single brand over time

Logo

An emblematic design adopted by an organization to identify its products.

Market share

A company's product sales as a percentage of total sales for that industry

Jingle

a short piece with a catchy repetition, used in commercials

Slogan

Catchy phrase or words that identify a product or company

Divergent Thinking

a type of thinking that is associated with creativity - seeing lots of solutions to a problem

Design Brief

A written plan that identifies a problem to be solved, its criteria, and its constraints.

Prototype

first model

Rasterize

The conversion of vector objects into pixel information.

Vector Drawing

is the use of geometrical primitives such as points, lines, curves, and shapes or polygon

opportunity cost

Cost of the next best alternative use of money, time, or resources when one choice is made rather than another

intellectual property

The ownership of intangible and non-physical goods. This includes ideas, names, designs, symbols, artwork, writings, and other creations.

Consumerism

a movement advocating greater protection of the interests of consumers

Consumption

the act of consuming something

Start-up expenses

Expenses incurred to decide whether to go into business and which business to enter can be expensed
up to $5,000; the balance is amortized over a period of 180 months. If the start-up expenses exceed $50,000, the immediate deduction is reduced dollar for dollar, until no deduction after $55,000.

Entrepreneurship

the process of starting, organizing, managing, and assuming the responsibility for a business. The foundation of the free market economy. Create diverse product market.

Basic Organization Structure

function, product, market, customer, location. Division of labor, structure for making decisions. Goal: Maintain efficiency in business.

Management Problems.

Span of Management - too many immediate subordinates to be effective. Job assignments unclear.

Management Structure

Functional, territorial, product and matrix

Functional Management Structure

Divides the parts of the business by what they do. Production, Acctg, marketing, etc.

Territorial structure

operations are spread out over a variety of areas each operating independently

Product structure

break along product lines such as an auto manufacturer

Matrix structure

functional and product structures - both financial and production oversee a project

Management style-Exploitative/Authorative

managerial decisions are imposed on subordinates and management has greater responsibility; little communication overall on the hierarchy; Employees very dependent on jobs and exploited by management. Ineffective

Management style-Exploitative/benevoloent

managerial assumption that management acts in the best interest of the workers; little communication overall on the hierarchy; Management patronizing and fail to take into account employees feelings. Ineffective

Consultative style

small degree of trust in employees by management; all employees feel some responsibility for the overall success of the company, there is some degree of teamwork and freedom to act on minor issues among employees. But management handles larger issues and does not trust lower level employees with important manners.

Participative-group style

most effective. Managers have trust in subordinates because every employee is well trained and competent. Motivation by reward not punishment.

Sole proprietorship

owned and operated by one person. Suffer from limited sources of capital, high risk. Do not have to pay income taxes on profits, only personal income.

Corporations

distinct and viable entity. Ownership of a corporation is held by individuals who own shares of corporation's stock. Individual shareholders are not responsible for the actions of the corporation-just lose initial investment. Employees cannot be prosecuted for the acts of the corporation at large. Attract solid managers, manipulate/influences govt policy to suit their ends.

Corporate governance

Stockholders elect the members of a board of directors who oversee the operations of the corporation. Real power held by management group not stockholders who cooperate with a few major stockholders to ensure they remain in power.

Proxies

permission given by stockholders to someone else to manage the stockholder's interest in the corporation.

Advantages of Corporations

ownership of corporations is easily transferable and it rarely has any effect on the daily operations of the business.

Disadvantages of corporations

double taxation; company taxed as legal entity and shareholders must pay income taxes on dividends.

Partnerships

business owned and operated by two or more principals for the purpose of making a profit. Jointly provide capital and labor in exchange for shared profit or loss. No govt permission is required for a partnership, business affairs do not have to be shared beyond partners., as a business form is not required to pay income taxes. Disadvantages: unstable, hard to dissolve if one partner is found to be incompetent.

Cooperative

small group of individuals or smaller groups that join together to achieve some common goals. Example: credit unions, retail consumer groups, residential organizations, and marketing associations.

Board of directors

selects upper level management including the CEO and supervises strategy and financial objectives.

Business planning

assess the business' current status, anticipate trends in the market and consider the financial implications of proposed plans. Planning is impossible without good records from the acctg department.

Steps to Business planning

1. Becoming aware of an opportunity or problem. 2. Define a clear and verifiable objective. 3. Develop the premises of their future plans - forecasting changes in market, assessing population growth and changes in price level. 4. Consider the various means of getting the job done, weigh alternatives. 5. Selecting a course of action. 6.Develop the supporting plans for the great plan to be completed.

Business Objectives

goals or end points to where the business is aiming.

Business Policies

statements of purpose that will define the way a business goes about achieving its goals. A successful set of policies set limits to business activity and encourage initiative.

Business strategies

Overall plans that take into consideration such external factors as trends in the marketplace or actions of the competitors. Course of action.

Business procedures

must be clear and specify exactly how future actions should be performed.

Business rules and programs

things that employees are either required to do or are forbidden from doing.

Open Market operations

government purchasing and selling of government securities (bonds) to affect the size of the money supply (to increase, buys securities)

Discount rate

rate of interest charged to member banks for loans.

Federal reserve

centralized national bank, established by the National Monetary Commission in 1908 via the Federal Reserve Act in 1913, bank of private banks. Consists of the Board of Governors, Fed Open Market Committee, 12 Federal Reserve banks and the various banks and advisory committees.

Interstate commerce commission ICC

established in 1887 by Interstate Commerce Act. Regulates rates that carriers charge and oversees any mergers, acquisitions and sales of carriers.

GDP Calculation

Sum of 4 components of aggregate demand: net exports-.exports less imports, consumption -.total spent on durable goods, non durable goods and services, investment and federal/state/local government purchases. Excludes net income from foreign sources -.that included is GNP.

Five Goals for a mixed economy

Full employment, stability, economic growth, efficiency, and equity.

Cost push inflation

increases in the cost of production lead to supply shortages across the economy, leading to an increase in prices.

Recession

Economic situation in which GDP is on the decline for 3 quarters. Leads to falling prices which can lead to a depression. Can sometimes lead to an increase in prices which is known as stagflation.

Perfect competition

State of a market in which there are a number of firms selling the identical product at the same price. No one firm has control over the market.

Monopolistic Competition

a market structure in which many companies sell products that are similar but not identical

Oligopoly

economics; a market in which control over the supply of a commodity is in the hands of a small number of producers and each one can influence prices and affect competitors

Monopoly

exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices

Supply

the desire and ability to sell a particular good at a particular price within a given time period.

Demand

Willingness to buy a certain quantity of goods at a particular price.

Relationship between supply and demand

demand curve slopes such that a greater quantity is being demanded when the price is lower.

Supply curve

Producers will make more goods as the price for those goods rises.

Law of Diminishing Returns

If one aspect of production is increased while all the others remain at the same level, the overall return will decrease after a certain point

Labor force

Unemployed and employed workers

Unemployed workers

Out of work but actively seeking work.

Seasonal unemployment

labor flux in a year

Frictional unemployment

huge numbers of people entering and leaving the job market at any time. Time between being unemployed and finding a job.

Structural unemployment

changes in industry result in a mismatch between jobs available and the skills possessed by workers.

Cyclical unemployment

unemployment that rises during economic downturns and falls when the economy improves

Competing in foreign markets

Investment, exporting, licensing agreements.

Balance of Trade

difference between the value of nation's exports and imports.

Comparative Advantage

the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than other producers.

Basic equation of accounting

Assets = sum of liabilities and capital.
Total Value of ownership = assets less liabilities

Property Rights

when a partnership or person owns a business, this ownership is registered as net worth, capital or proprietorship. When a business has borrowed funds in order to sustain operations, claims to the lenders are known as liabilities. Taxes on property are also a liability.

Stockholder's Equity

Amount of original investment + dividends

Sales, net sales

total amount of goods sold in a period - considered final when delivered. Net sales = sales less returns, damaged goods and discounts.

Cost of goods sold

the total cost of buying raw materials and paying for all the factors that go into producing finished goods; Does not include things like office expenses, shipping or advertising.

Inventory Turnover ratio

A ratio that measures the liquidity of inventory by measuring the number of times average inventory sold during the period; computed by dividing cost of goods sold by the average inventory during the period.

Total Marketing concept

The idea that a business must organize itself so that the marketing department has the resources to attract new customers. Marketing activities account for about 1/3 to 1/4 of the workforce.

Marketing Mix

Combination of tools used by marketing program to promote a certain product to market. Includes product mix, distribution mix, communication mix and the service mix.

Copyright

the exclusive, legal right of a person to reproduce, publish, and sell his or her own literary, musical, or artistic creations

Trademark

a name, symbol, or other device identifying a product; it is officialy registered with the U.S. government and its use is legally restricted to its owner

Patent

a document granting an inventor sole rights to an invention

Market segmentation

When marketing executives attempt to remove the threat of competition by marketing their product to an exclusive portion of the population.

Phases of Marketing

(1) Marketing executives research the market in an attempt to determine exactly what goods and services customers are looking to buy. (2) Company attempts to provide the product to the public at the appropriate time,place,and price.

Intermediate purchasers

Buy things to resell. Unlikely to be susceptible to flashy marketing.

Physical Distribution management

Transfer of goods from producer to customer. Main goals: maximize level of customer service and minimize cost to company.

LIFO

inventory accounting in which the most recently acquired items are assumed to be the first sold; method is supposed to create the lowest ending inventory in a period of rising prices. Also create a lower taxable income, lower gross profit.

FIFO

inventory accounting in which the oldest items (those first acquired) are assumed to be the first sold; creates a higher ending inventory and lower cost of goods sold, higher gross profit and higher taxable income.

Price Elasticity

A measure of the sensitivity of demand to changes in price. Calculated by dividing the percent change in quantity demanded by the percent change in price.

Consumer Education

Enables students to enter the marketplace with a more sophisticated understanding of how to spend their money.

Consumer budget

Fixed expenses, variable expenses, and discretionary expenses.

Consumer finance companies

Small companies that loan money for basically any purpose at a high interest rate.

Comercial Banks

All commercial banks in the US are owned by private individuals thru the purchase of common stock.

Prime rate

rate of interest banks charge on short-term loans to their best customers

FDIC

Federal Deposit Insurance Corporation: A federal guarantee of savings bank deposits initially of up to $2500, raised to $5000 in 1934, and frequently thereafter; continues today with a limit of $250,000

Deposit insurance

A system under which the government guarantees that depositors will not lose any money even if their bank goes bankrupt.

Savings banks

depository institution originally set up to serve small savers overlooked by commercial banks

Savings and loan association

a thrift institution that is required by law to make a certain percentage of its loans as home mortgages

Life Insurance companies

Large holders of individual savings; assets of life insurance company are earned by selling policies for much more money than the likely cost of death benefits to be paid out at the time they are sold. Insurance companies typically invest their assets in corporate stock, corporate stock bonds and home mortgages.

Commercial finance companies

purchase the accounts receivable of a business at a discount but seller pays if default. Make loans on business inventory or machinery and equipment. Charge higher rates that commercial banks due to higher risk involved.

Factoring and Commercial Finance

Factoring companies purchase accounts receivable from businesses at a discount also but take the loss if the accounts receivable is unpaid.

Sales finance companies

Allow people to pay for items on a payment plan.

Leasing advantages and disadvantages

More expensive to lease because companies pay for interest and depreciation on equipment. Leasing costs are tax deductible and there is less up front cost layout, less commitment to assets.

Public market

Individuals and companies that buy stocks, bonds and insurance.

Common Stock

Represents ownership in a publicly held company which entitles owners to dividends (if declared by the company's Board of Directors), voting rights on matters affecting the company, and in the elections of Boards members.

Par value

value assigned to a share of stock and printed on the stock certificate

Preferred stock

Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold

Corporate bonds

Long-term debt issued by private corporations typically paying semi-annual coupons and returning the face value of the bond at maturity

Types of bonds

Mortgage bond; property on bond;, Collateral trust bond; stocks and bonds held from other companies are held as security of repayment; Debenture; assets and earnings of company offered as repayment;

Investment banks

Financial institutions that assist firms in the process of issuing securities to investors. Investment banks also advise firms engaged in mergers and acquisitions, and they are active in the business of selling and trading securities in secondary markets.

Brokerage Houses

Employ market analysts to research firms to find strengths and weaknesses of businesses looking for financial investors. Almost all investment banks operate as brokers. Charge a commission on purchases and sales.

Security Exchange

A marketplace where member brokers who represent investors meet to buy and sell securities. NYSE.

Security exchange members

4 types: commission brokers, registered traders, odd-lot dealers, those who focus on own behalf.

Listed stock

Stock that is authorized to be bought and sold.

Securities investors

buys stocks for long term use.

Price earnings ratio

Ratio between the market price of a stock and the profits per share over the last year. To compute the Price -Earnings ratio, divide the earnings into the market price of stock.

Speculation market

people buying on the margins--paying cash for some and using credit for the remainder of the purchase. Problem: people cannot pay off their credit

Bear market

Stock market that experiences a general decline in prices of stock. Not all stocks experience a decline in value, but most do.

Bull market

Stock market experiences a general rise in prices and stock trading volume for shares over a period of time.

Option trading

Options to buy and sell stock are exchanged.

SEC

an independent federal agency that oversees the exchange of securities to protect investors

Promissory Note

a written contract with a promise to pay a supplier a specific sum of money at a definite time

Risk management

identify, consider and make the most efficient defense against various types of risk.

Career cluster

jobs or occupations grouped together because of similar knowledge or skills

4 main categories of employee rights

collective bargaining, working hours and pay, workplace safety, discrimination in the workplace.

Human resource accounting

A process designed to measure the present cost and value of human resources as well as their future worth to the organization.

Applications for employment

Application forms cannot inquire about age, marital status, arrest records, gender, religion, citizenship or nationality.

Statute of Frauds

State law requires certain instruments, such as deeds, real estate sales contracts and certain leases, to be in writing to be legally enforceable

nafta

A trade agreement between Canada, the United States and Mexico that encourages free trade between these North American countries.

rate of return on bonds

Yield is a figure that shows the return you get on a bond. The simplest version of yield is calculated using the following formula: yield = coupon amount divided by price. When you buy a bond at par, yield is equal to the interest rate. When the price changes, so does the yield.

converting foreign exchange rates

This report promulgates exchange rate information pursuant to Section 613 of Public Law 87-195 dated September 4, 1961 (22 USC 2363 (b)) which grants the Secretary of the Treasury sole authority to establish for all foreign currencies or credits the exchange rates at which such currencies are to be reported by all agencies of the government. The primary purpose is to ensure that foreign currency reports prepared by agencies shall be consistent with regularly published Treasury foreign currency reports as to amounts stated in foreign currency units and U.S. dollar equivalents.

National environmental policy 1967

is a United States environmental law that established a U.S. national policy promoting the enhancement of the environment and also established the President's Council on Environmental Quality

stock split

A division of shares of a company into a larger number of shares. A 2 for 1 split allows a shareholder to double the number of shares but worth one half of their previous value.

GDP

Gross Domestic Product

GNP

gross national product

M0

M0: In some countries, such as the United Kingdom, M0 includes bank reserves, so M0 is referred to as the monetary base, or narrow money.

MB

is referred to as the monetary base or total currency; This is the base from which other forms of money like checking deposits are created and is traditionally the most liquid measure of the money supply

M1

narrowest measure of the money supply that includes all coins and paper bills in circulation, traveler's checks, checking account balances, and balances in credit unions

M2

All of M1 + less immediate (liquid) forms of money to include savings, money market mutual funds, and small denomination time deposits.

M3

measure of the money supply Example. M2 plus deposits at institutions that are not banks such as savings and loan associations

MZM

Money Zero Maturity; A definition of the money supply that includes monetary balances immediately available at zero cost to households and businesses for making transactions. Equals M2 minus small time deposits plus money market mutual fund balances owned by businesses.

Delta Pi Epsilon

a national graduate honorary society for professionals who support and promote scholarship, leadership, and cooperation toward advancement of education for and about business. Established in 1936 at New York University.

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