Terms in this set (108)
A system for recognizing, organizing, analyzing, and reporting information about the financial transactions that affect an organization
Who uses accounting?
Managers, Stockholders, Employees, Creditors, Suppliers and Government agencies
Who does accounting?
Public accountants (CPA), management accountants, and government accountants
Branch of accounting that focuses on information for people outside the firm
(Generally Accepted Accounting Principles) Common set of standards that the accounting profession has developed and generally accepted and universally practiced
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time.
Economic resources (things of value) owned by a firm.
Claims that outsiders have against a firm's assets
The claims a firm's owners have against their company's assets
Assets = Liabilities + Owner's Equity
A financial statement that presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time.
Cash flow statement
A financial statement that shows the flow of money in and out of the business.
Accounting used to provide information and analyses to managers within the organization to assist them in decision making.
Value of what is given up in exchange for something
a cost that involves the payment of money or other resources
Opportunity costs of using resources owned by firm or provided by firm's owners
Costs of production that do not change when output changes.
Costs that change according to the level of production.
Costs that are incurred directly as the result of some specific cost object.
Costs that are the result of a firm's general operations and are not directly tied to any specific cost object
A management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period
Budgets that communicate an organization's sales and production goals and the resources needed to achieve these goals
budgets that focus on the firm's financial goals and identify the resources needed to achieve these goals
A presentation of an organization's operational and financial budgets that represents the firm's overall plan of action for a specified time period
The funds a firm uses to acquire its assets and finance its operations
The functional are of business that is concerned with finding the best sources and uses of financial capital
Degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit.
the observation that financial opportunities that offer high rates of return are generally riskier than opportunities that offer lower rates of return
Financial ratio analysis
computing ratios that compare values of key accounts listed on a firm's financial statements
Financial ratios that measure the ability of a firm to obtain the cash it needs to pay its short-term debt obligations as they come due
Assets that easily converts to cash.
Asset management ratios
financial ratios that measure how effectively a firm is using its assets to generate revenues or cash
Ratios that measure the extent to which a firm relies on debt financing in its capital structure
Measure the rate of return a firm is earning on various measures of investment
Budgeted income statement
a projection showing how a firm's budgeted sales and costs will affect expected net income
Budgeted balance sheet
A projected financial statement that forecasts the types and amounts of assets a firm will need to implement its future plans and how the firm will finance those assets. (Also called a pro forma balance sheet.)
A detailed forecast of future cash flows that helps financial managers identify when their firm is likely to experience temporary shortages or surpluses of cash.
Spontaneous financing granted by sellers when they deliver goods and services to customers without requiring immediate payment
A company that provides short-term financing to firms by purchasing their accounts receivables at a discount.
Line of credit
A financial arrangement between a firm and a bank in which the bank pre-approves credit up to a specified limit, provided that the firm maintains an acceptable credit rating
Time value of money
A concept that money available now is worth more than the same amount in the future because of its potential earning capacity
Net present value
(NPV) The sum of the present values of expected future cash flows from an investment, minus the cost of that investment.
Markets that transfer funds from savers to borrowers
What are the 3 depository institutions?
Commercial banks, credit unions, and savings and loan associations.
What are the 4 non-depository institutions?
Institutional investors, securities brokers, securities dealers, and investment banks.
Federal Reserve Act of 1913
The law that established the Federal Reserve System as the central bank of the United States
Banking Act of 1933
The law that established the Federal Deposit Insurance Corporation (FDIC) to insure bank deposits. It also prohibited commercial banks from selling insurance or acting as investment banks.
Securities Act of 1933
Regulated the securities industry.
Securities and Exchange Act of 1934
an independent agency of the government that regulates financial markets and investment companies
the most basic form of ownership.
A type of stock that gives its holder preference over common stockholders in terms of dividends and claims on assets.
A formal IOU issued by a corporation or government.
A primary market issue in which new securities are offered to any investors who are willing and able to purchase them
A primary market issue that is negotiated between the issuing corporation and a small group of accredited investors
Initial public offering
(IPO) is the first offering of stock to the general public
Dow Jones Industrials Average, an index that tracks stocks prices of thirty corporations.
Standards & Poor's 500
a stock index based on the prices of 500 major US corporations in a variety of industries and market sectors
An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders
Customer relationship management
The ongoing process of acquiring, maintaining, and growing profitable customer relationships by delivering unmatched value
A customer perception that a product has a better relationship than its competitors between the cost and the benefits.
Customers' evaluation of a good or service in terms of whether it has met their needs and expectations.
A formal document that defines marketing objectives and the specific strategies for achieving those objectives.
Dividing the total market into smaller groups of people who share specific needs and characteristics.
Description of how people act when they are buying, using, and discarding goods and services for their own personal consumption. Consumer behavior also explores the reasons behind people's actions
Consumer discomfort with a purchase decision, typically for a higher priced item.
Business buyer behavior
Describes how people act when they are buying products to use either directly or indirectly to produce other products.
Marketing research that does not require the researcher to interact with the research subject
Marketing research that requires the researcher to interact with the research subject
Developing and promoting environmentally sound products and practices to gain a competitive edge
A strategy that uses technology to deliver customized services on a mass basis
Anything that an organization offers to satisfy consumer needs and wants.
products that do not include any services
products that do not include any goods
The attributes that make a good or service different from other products that compete to meet the same customer needs.
The specific characteristics of a product
advantage of personal satisfaction that a customer will get from specific product features
A group of closely related product items
The total number of product lines and individuals items sold by a single firm
When a producer offers a new product that takes sales away from its existing products.
A products identity
The overall value of brand to an organization
Similar products offered under the same brand name
A new product sold with the same brand name as a strong existing brand
Brands that the retailer both produces and distributes
Product life cycle
A pattern of sales and profits that typically changes over time.
Marketing communication designed to influence consumer purchase decisions through information, persuasion, and reminders.
Integrated marketing communication
The coordination of marketing messages through every promotional vehicle to communicate a unified impression about a product.
specific marketing communication vehicles, including traditional tools, such as advertising, sales promotion, direct marketing, and personal selling, and newer tools such as product placement, advergaming, and internet minimovies
The paid integration of branded products into movies, television, and other media.
The active simulation of word-of-mouth via unconventional, and often relatively low-cost, tactics.
Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.
Marketing activities designed to stimulate wholesalers and retailers to push specific products more aggressively over the short term
The ongoing effort to create positive relationships with all of a firm's different "publics"
Any unpaid form of nonpersonal presentation of ideas, goods, or services
A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers.
A marketing strategy that stimulates consumer demand to obtain product distribution
a plan for delivering the right product to the right person at the right place at the right time
Channel of distribution
The network of organizations and processes that links producers to consumers
The actual, physical movement of products along the distribution pathway
Distributers that sell products directly to the ultimate users, typically in small quantities, that are stored and merchandized on the premises.
Distributors that buy products from producers and sell them to other businesses or nonfinal users such as hospitals, nonprofits, and the government
providing multiple distribution channels for consumers to buy a product
All organizations, processes, and activities involved in the flow of goods from the raw materials to the final consumer
Supply chain management
Planning and coordinating the movement of products along the supply chain, from the raw materials to the final consumers
Modes of transportation
the various transportation options- such as planes, trains, and railroads- for moving products through the supply chain
A new product pricing strategy that aims to capture as much of the market as possible through rock-bottom pricing.
Aims to maximize profitability by offering new products at a premium price.
The process of determining the number of units a firm must sell to cover all costs.