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REVIEWER > BUSINESS FINANCE > Flashcards

BUSINESS FINANCE Flashcards

1
Q

deals with decisions that are supposed to maximize shareholders wealth

A

financial management

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2
Q

play a crucial role in making financial decisions and exercising control over finances in the organizations

A

financial decisions and controls

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3
Q

are responsible for the planning of financial activities and resources in the organization

A

financial planning

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4
Q

responsibility of financial management to estimate the capital requirements of the organization from time to time

A

Capital management

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5
Q

ensures that all financial resources of the organization are used and invested effectively and efficiently

A

allocating and utilization of financial resources

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6
Q

important for organizations to have sufficient working capital and cash flow to meet their operational expenses and emergencies

A

cash flow management

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7
Q

the decision on how to surplus or profits the organizations is utilized is taken by the financial managers. they decided if dividends should be distributed

A

disposal of surplus

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8
Q

maintain all necessary reports related to the finance of the organization

A

financial reporting

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9
Q

prepares the organization to forecast risk, put in place mitigation plans as well as to meet unforeseen risk and emergencies effectively

A

risk management

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10
Q

goal of financial management

A

to minimize the value of shares of stocks

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11
Q

the owners or investors in the firm

A

shareholders

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12
Q

appointing and removing members of the top management including president

A

board of directors

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13
Q

it is the highest policy making body in a corporation

A

board of directors

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14
Q

overseeing the operations of a company and ensuring that the strategies as approved by the board are implemented as planned

A

president

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15
Q

representing the company in professional social, and civic activities

A

president

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16
Q

formulating marketing strategies and plans

A

vp for marketing

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17
Q

ensuring production meets customers demands

A

vp for production

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18
Q

identifying adequete and cheap raw material

A

vp for production

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19
Q

assisting other departments in hiring employees

A

vp for administration

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20
Q

identifying means, process, or systems that will minimize the operating cost of the company

A

vp for administration

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21
Q

funding long-term investment and working capital which deals with the day to day operations of the company

A

vp for finance

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22
Q

developing policies on dividends

A

vp for finance

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23
Q

dealing with daily operations of the company

A

vp for finance

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24
Q

serves as the link between depositor who has the money and the lender who needs money

A

financial intermediary

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25
Q

include commercial banks, universal banks, investment banks, investment companies, mutual funds companies and private equity firms

A

financial institutions

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26
Q

managing financial matters

A

financial management

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27
Q

the tools that helps a business daily operations

A

financial instruments

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28
Q

are funds that are available for a short-term

A

money market instruments

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29
Q

they are available most of the time and do not provide very high returns

A

money market instruments

30
Q

•issued by the government
•maturity within a year
•not risky, because government must make an effort to pay

A

treasury bills (t-bills)

31
Q

•issued by financial sound business to fund inventories and receivables
•maturity is about o months
•generally low default risk

A

commercial papers

32
Q

•issued by banks or mutual funds companies
•maturity date is not specific
•default risk is low
•usually invested in money market instruments, commercial papers, and treasuries

A

money market funds

33
Q

is an example of long-term debt. it is a security reflecting the debts of a government or business debt

A

bond

34
Q

another example of long-term debt that has longer than a money market instruments

A

note

35
Q

•issued by the government
•mature in two, five or ten years or move
•bond price usually fall becoming less attractive as interest rates in the market rise

A

treasury nites and bonds

36
Q

•issued by federal agencies and it is similar to treasuries
•long-term maturity
•low default risk

A

federal agency debt

37
Q

•issued by the local government
•long-term maturity
•more risky than government securities

A

municipal bonds, local government bonds

38
Q

•issued by corporation s
•maturity in 40 years
•more risky than government securities

A

corporate bonds

39
Q

types of security that represents ownership in a corporation

A

stocks

40
Q

•issued by corporation in exchange of ownership

A

preferred stock (preference share)

41
Q

units of ownership in a public corporation

A

common stock (ordinary share)

42
Q

the meeting places of suppliers and users of various types of funds that can make transaction directly

A

financial market

43
Q

buyers and sellers negotiate and transact business directly without an intermediary

A

primary market

44
Q

new securities to the general public and the first offering of stocks is called IPO or initial public offering

A

public offering

45
Q

previously issued securities are bought and sold

A

secondary market

46
Q

securities with short-term maturities are borrowed or loaned

A

money market

47
Q

financial market for stocks for a long-term period

A

capital market

48
Q

is an estimate of cost, revenues, and resources over a specified period, reflecting a reading of future financial conditions and goals

A

budget

49
Q

it is made to estimate how much their revenue and expenses would be within a year

A

operating budget

50
Q

It is displays the expected cash receipts and disbursements for an accounting period.

A

cash budget

51
Q

compose of collection from receivables, proceeds from loans, issuance of new shares of stocks and advances from the stockholders

A

cash receipts

52
Q

include payments to suppliers and other service providers, loans, and cash dividends

A

cash disbursement

53
Q

current assets like casg, accounts receivable, inventories and prepaid expenses used in the operation of the business

A

working capital

54
Q

is the difference between current assets and current liabilities

A

net working capital

55
Q

is the average number of days to sell its inventory

A

days of inventory

56
Q

the time it takes collect cash from the sale of the inventory

A

days of receivable

57
Q

is a metric that expresses the time (measured in days) it takes for a company to convert its investment in inventory and other resources into cash flows from sales

A

cash conversion cycle

58
Q

refers to the minimum level of current assets required by the firm to continue the operations of the business and to cover up all current liabilities

A

permanent or fixed working capital

59
Q

difference between net working capital and permanent working capital. it can help the business to survive during the slack season

A

temporary working capital

60
Q

involves the maintenance of a casg and marketable securities investment level which enables the company to meet its casg requirements and at the same time, optimize the income of idle funds

A

cash management

61
Q

cash is needed for the day to day operation of business

A

transaction motivate

62
Q

some banks requires a company to maintain a certain compensating balance for their depositing accounts and loans

A

contractual motive

63
Q

firms hold casg to be ready incase of unwanted situation

A

precautionary motive

64
Q

a company holds cash for others investment opportunities

A

speculative motive

65
Q

use in determining the casg needs of the company

A

cash budget

66
Q

providing credits to a customer is one way of increasing sales and gaining additional customers

A

receivables management

67
Q

5 c’s of credit can be used in credit evaluation

A

character
capacity
capital
collateral
condition

68
Q

Is the borrower’s willingness to pay the loan

A

character

69
Q

is the borrower’s ability to pay the loan

A

capacity

70
Q

is the borrowers financial resources

A

capital

71
Q

is the borrowers security pledge for the loan payment

A

collateral

72
Q

is the current economic or business conditions

A

condition

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