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EEE 2023 Final Review Barringer
Terms in this set (54)
Deals with two activities: Raising money and managing a company's finances in a way that achieves the highest rate of return.
Four Objectives of a Firm
A company's ability to make a profit.
A company's ability to meet its short-term obligations.
How productively a firm utilizes its assets.
The overall health of the financial structure of the firm, particularly as it relates to its debt-to-equity ratio.
Depict relationships between items on a firm's financial statements and are used to discern whether a firm is meeting its financial objectives and how it stacks up against its industry peers.
Historical Financial Statements
Reflect past performance and are usually prepared on a quarterly and annual basis.
Pro Forma Financial Statements
Projections for future periods based on forecasts and are typically completed for two to three years in the future.
Reflects the results of the operations of a firm over a specified period of time.
A snapshot of a company's assets, liabilities, and owner's equity at a specific point in time.
Statement of Cash Flows
Summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred.
The point where total revenue received equals total costs associated with the output of the product/place.
A New-Venture Team
Group of founders, key employees , and advisors that move a new venture from an idea to a fully functioning firm.
Liability of Newness
The fact that companies often falter because the people who start them aren't able to adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and suppliers.
Areas of expertise are very similar to one another.
People are diverse in terms of their abilities and experiences.
Qualities of the Founders
Prior Entrepreneurial Experience
Relevant Industry Experience
Board of Directors
A panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm.
Legally required if the company is incorporated.
Board of Advisors
A panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.
Providing legitimacy for the entrepreneurial venture.
An individual who gives professional or expert advice.
Large international consulting firms.
Free consulting to firms. Large array of choice.
Sources of Personal Funding
Friends and Family
Finding ways to avoid the need for external financing or funding through creativity, ingenuity, thriftiness, cost-cutting, or any means necessary.
Forms of raising money
Debt Financing: Loans
Equity Investment: Shark Tank example
Individuals who invest their personal capital directly in start-ups.
Money that is invested by venture capital firms in start-ups and small businesses with exceptional growth potential.
Initial Public Offering (IPO)
Another way of equity funding by selling stocks to the public.
Secondary Market Offering
Any later public issuance of shares after an IPO.
Rewards based: Kickstarter
Equity Based: Helps businesses raise money by tapping individuals who provide funding in exchange for equity in the business.
A financial transaction whereby a business sells its accounts receivable to a third party, called a factor, at a discount in exchange for cash.
Studying the industry in which the firm intends to compete and determine the different potential target markets in that industry.
Have to advertise to a large amount of people in order for a small percentage to actually purchase the product.
The set of attributes -positive or negative- that people associate with a company.
Four P's of Marketing
Price - The only one that earns revenue.
Refers to efforts to establish and maintain a company's image with the public.
A folder that contains background information about the company and includes a list of its most recent accomplishments.
Any product of human intellect that is intangible but has value in the marketplace. The one part of a company that is invaluable in our time.
Four Forms of IP
4. Trade Secrets
A grant from the federal government conferring the rights to exclude other from making, selling, or using an invention for the term of the patent.
20 Year Life
Any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others.
Logos: Pistol Pete for OSU
A form of IP that grants to the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits from the work.
Any formula, pattern, physical device, idea, process, or other information that provides the owner of the information with a competitive advantage in the marketplace.
Takes place when one party engages in the unauthorized use of another party's patent.
Growth in both revenues and profits over a sustained period of time.
Economies of Scale
Generated when increasing production lowers the average cost of each unit produced.
Internal Growth Strategies
Involve efforts taken within the firm itself, such as new product development, other product-related strategies, and international expansion.
Internally generated growth that does not rely on outside intervention.
New Product Development
Involves designing, producing, and selling new products as a means of increasing firm revenues and profitability.
Market Penetration Strategy
Involves actions taken to increase the sales of a product or service through greater marketing efforts or through increased production capacity and efficiency.
A form of business organization in which a firm that already has a successful product or service licenses its trademark and method of doing business to other businesses.
Contract that consummates the sale of a franchise.
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