Business Acumen Flashcards
Income statement
a statement that reports revenues, expenses, and profits for a specific period of time, for example, quarterly or annually. The statement indicates the company’s net income, which is referred to as their bottom line. “Provides information about their performance.
AKA profit and loss statement
Different from a balance sheet.
Value
The benefit created when a company meets its strategic goals, a measure of usefulness, worth, or importance. It is influenced by mission and culture.
Gross profit margin
Compares gross profit with sales . Gross profit / net sales= gross profit margin
It is a metric from the income statement.
Ratio of gross profit to net sales.
Equity
amount of owners’ or shareholders’ portion of a business. It is what is left of a company’s assets after its liabilities have been discharged. It is combined with liabilities on a balance sheet.
Liabilities
Company’s debt and other financial obligations. Examples: rent, loans, wages, benefits, unpaid fines, tax debt.
Business Intelligence
Ability to use information to gain a deeper understanding of a company and make sound business decisions.
There are 3 basic components:
Data gathering
Data warehousing
Query and reporting capabilities
Enterprise resource planning
Business management software is usually a suite of integrated applications that a company can use to collect, store, manage, and interpret data from many business activities.
Allows everyone in the company to access the same current data and improve communication and coordination.
Value chain
The process by which a company creates the product or service it offers to the customer. AKA business model.
HR helps the value chain through the quality and availability of pivotal talent pools.
Balance sheet
Statement of a company’s financial position at a specific point in time, showing assets, liabilities, and shareholder equity. It indicates the company’s financial health. They change as new transactions are recorded.
Only things that are measurable by money are recorded.
Assets= liabilities + equity
Any money entered as an asset should is balanced by offsetting liabilities.
Account payable
Money a company owes its vendors and suppliers.
Balanced Scorecard
A tool to gather business intelligence. Provides a concise impression of a company’s overall performance. It can be used to focus the company and its function on key strategies. Supports a clear line of sight from strategic goals to strategic performance.
Must include accountability and measurable results
A performance management tool that depicts a company’s overall performance as measured against goals, lagging indicators, and leading indicators
Ways a balanced scorecard can be used in strategic management
Translating the vision
Communicating and linking objectives to strategic goals
Business planning
Feedback and learning
Assets
Financial, physical, and sometimes intangible properties a company owns
Account receivables
the money a company’s customer owes the company
Analytical processing
Applications that can analyze data faster and in more ways than traditional relational databases, offering a multidimensional analysis of business data
Cash flow statement
Shows how money is flowing into and out of the company
Illustrates the effect of all the company’s activities that both consume value(production) and produce value (sales) on how much cash or cash equivalents the company has on hand
statement of a company’s ability to meet its current and short-term obligations, showing incoming and outgoing cash and cash reserves in operations, investments, and financing
Net profit margin
Ratio of net incomes (gross sales minus expenses and taxes) to net sales
Business case
Presentation to management that establishes that a specific problem exists and argues for a proposed solution
Service level agreement
Document that defines the output customers can expect
Buisness plan
the founding document. it establishes the company’s purpose for existing. Inclues company structure, marketing plan, and financial projections
Strategic Plan
Document that outlines how the company intends to fulfill its purpose. Inclues the mission and vision, goals, and budget
Organizational Chart
diagram that shows the hierachry within the company
Standard operating preocedure (SOPs)
formal guides that outlines how a work process or activity should be completed.. common for activities and processes that are repetitive
Business continuty plans
a document that outlines how a company will maintain operations during unplanned disruption
