21 terms

Kin 315m Chapter 14

STUDY
PLAY
Finance
science of fund management that incorporates concepts from accounting, statistics, and economic. A good understanding of finance allows managers to maximize wealth and/or maximize the overall value of the firm
Economics
economics of sports is defined as the study of h ow people within the sport industry deal with scarcity
Scarcity
scarcity is not enough resources to meet the wants and needs of society
Economic interaction
one product of value (a good) is exchanged for another product of value
Microeconomics
the big picture, growth, recessions, unemployment rates and interest rates
Real gross domestic (GDP)
measurement of the value of goods and services newly produced by a company during a period of time
Peak
economic activity reaches temporary max level
Microeconomics
the study of the behavior of individual businesses and households. 2 important aspects are 1) supply demand model and 2) market structures
How have sport organizations dealt with economic problems
they try to equalize the difference in team revenue through revenue sharing. Ex. sharing television rights, fees, and merchandise sales
Econoimcs of sport
economics of sport is defined as the study of how people within the sport industry deal with scarcity (not enough resources to meet the wants of society)
components of the business cycle
Expansion/recession. peak: economic activity reaches temporary max level. Trough:economic activity reaches its lowest level
Inflation rate
percentage increase in the overall price level of goods and services over a given period, usually 1 year. Ex. if the inflation rate is 4% a $100 product today would cost $104 in a year
Interest rates
the amount that financial institutions charge when lend money, presented as a percentage of the amount of money loaned.
exx. you borrow $1000 at 5% interest rate, you would owe $1050 for the loan
Supply demand model
the relationship between price of the product and the amount consumers are willing to pay
Market surplus
suppliers willing to produce and sell more of a product than consumers are willing to buy
Market storage
consumers willing to buy more of a product than suppliers are willing to sell
3 basic elemts of financial statements
balance sheets, income statements and cash flow statements
financial statements
reflect the financial condition of the organization
Balance sheet
assets: financial resources (cash, inventory, land)
liabilities: obligations to pay money or provide goods/services to others
Owners equity: owners investment in the business includes retained earnings, paid-in capital and stock held by the organization
Income statements
provides financial results of the organizations operations over a period of time usually reported at the end of the year, represents the company's net profit or loss
cash flow statement
shows inflow and outlaw of cash, records what the income statement does not, and provides the best picture on the overall financial health of organizations