Business Management - Glossary Flashcards
an unwritten promise to pay creditors for property, such as merchandise, supplies, or equipment, purchased on credit, or for services received on credit
accounts payable
an unwritten promise by a customer to pay, at a later date, for good sold or services rendered
accounts receivable
the process of guiding and/or supervising the activities of an organization to achieve plans and objectives
actuating / directing / leading
a company that is inherited or bought
acquisition
the art of making the public aware of the services or commodities that the business has for sale
advertising
federal legislation that requires employer to treat applicants and employees equally regardless of age
Age Discrimination in Employment Act
measures the average time required to collect receivables
age of accounts receivable
measures the average time required to sell inventory
age of inventory
the paying off of a debt in regular installments over a period of time
amortization
legislation that guarantees disabled people equal access to employment, as well as access to public places
Americans with Disabilities Act (ADA)
private investors who are willing to supply financing for new and/or risky small venture start-ups
angel investors
a formal financial statement illustrating the assets, liabilities, and owner’s equity of a business as of a specific date
balance sheet
a qualification that is absolutely necessary for the job; it is an allowed and approved reason for discrimination
bona fide occupational qualification (BFOQ)
a method of applying verbal and/or symbolic means to identify a product and/or service
branding
the point at which total sales revenue equals total operating costs; determined by formula or chart
break-even analysis
an organization that combines inputs of raw materials, capital, labor, and management skills to produce useful outputs of goods and services so as to earn a profit
business
insurance that protects companies during the period necessary to restore property damaged by an insured peril; coverage pays for lost income and other expenses related to recovery
business interruption insurance
a summary of how a business owner, manager, or entrepreneur intends to organize the business endeavor and implement the activities necessary for the venture to succeed
business plan
fundamental statements that serve as guides to management practice
business policies
an ordinary corporation, taxed by the federal government as a separate legal entity
C corporation
the amount by which the total assets exceed the total liabilities of a business; an owner’s financial interest in a business
capital / net worth / owner’s equity / proprietorship
discounts from quoted prices as an inducement for prompt payment of invoices
cash discounts
the amount of cash a company generates and uses during a period
cash flow
a financial report showing a firm’s sources of cash as well as its uses of cash
cash flow statement
insurance that provides monetary benefits to a business that has experienced an unforeseen peril, such as flood, fire, etc.
casualty insurance
source of market data that explains where certain business are located
census of business
source of market data that keeps track of new home sales by region and/or the construction of new houses by region and specific area
census of housing
source of market data that explains where certain manufacturers are located
census of manufacturing
a source of market data that complies population statistics with regard to distribution of population by region, area, etc.
census of population
an association of business people who attempt to protect and promote the commercial interest in a community
chamber of commerce
the difference between current assets and current liabilities
circulating capital / working capital
federal legislation that prohibits discrimination on the basis of race, color, religion, sex, pregnancy, or natural origin
Civil Rights Act
balance of costly goods paid for in small monthly (fractional) payments over a period of time
closed end credit / installment credit
the practice of trying to obtain something that is being sought by others under similar circumstances at the same time
competition
a type of credit granted by retailers that is used by individuals or families for satisfaction of their own wants
consumer credit
the emphasis placed on providing to customers products and services that are safe, reliable, and honestly advertised; also a social movement that seeks to strengthen the rights of consumers relative to sellers
consumerism
the process of measuring organizational and individual performance with predetermined standards or expected results
controlling / evaluating
the registered right of a creator to reproduce, publish, and sell the work which is the product of the intelligence and skill of that person
copyright
an artificial being, invisible, intangible, and existing only in contemplation of law; an entity that has a distinct existence separate and apart from the existence of its individual members
corporation
an agreement that payment for a product or service will be made at some later date
credit
any borrowed or loaned capital invested in the business that must be repaid to creditors
debt equity
the statistical study of human populations with respect to their size, density, distribution, composition, and income
demographics
the loss in value of a fixed asset due to wear and tear and the passage of time; or, a method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life
depreciation
a business valuation approach which centers on estimating the projected future income of the business typically over a 5-10 year period
earning valuation approach
a firm’s profits after subtracting cost of goods sold and cash operating expenses, but before subtracting interest expense, taxes, depreciation, and amortization
earnings before interest, taxation, depreciation, and amortization (EBITDA)
the wealth produced in or near a community that provides employment and income to the local population
economic base
the quantity to be purchased which minimizes total costs
economic order quantity (EOQ)
a record of statements made at the time the applicant first seeks employment
employment application
an opportunity to judge the job applicant’s appearance, poise, speech, etc.
employment interview
one who organizes, manages, and assumes the risk of a business firm or venture
entrepreneur
a governmental agency with environment protection regulatory and enforcement authority
Environmental Protection Agency (EPA)
federal legislation designed to eliminate employment discrimination based on race, color, religion, sex, or national origin
Equal Employment Opportunity Act
federal legislation which outlaws discrimination in pay against those who are over forty years old
Equal Pay Act
capital that is invested or available for investment in the ownership of a business
equity capital
a method to obtain cash for business operations before payments are received from customers by selling off accounts receivable to a third party
factoring
federal legislation which outlaws discriminatory practices in pay; requires employers to pay a minimum wage to employees, and to pay a minimum of one and one-half times the regular rate for any hours beyond forty worked in a week
Fair Labor Standards Act (Wage and Hour Law)
federal legislation that ensures employees of unpaid leave for childbirth and other family needs
Family and Medical Leave Act (FMLA)
long-term capital that is invested in the small business; also, funds invested in such long-term assets as land, building, machinery, furniture, fixtures, and other equipment
fixed capital
a cost that, for a given period of time and range of activity, called the relevant range, does not change in total, but becomes progressively smaller on a per unit basis as volume increases; these expenses do not increase with increased business, nor do they decrease with declining business activity
fixed expenses
an intangible asset such as the name of a funeral home; also, an intangible asset which enables a business to earn a profit in excess of the normal rate of profit earned by other businesses of the same kind
goodwill
net sales minus the cost of goods sold
gross margin / gross profit
process of acquiring, training, developing, motivating and appraising a sufficient quantity of qualified employees to perform necessary activities; developing activities and an organizational climate conducive to maximum efficiency and worker satisfaction
human resource management / personnel management
federal legislation requiring employers to check job applicants’ papers to be sure they are either US citizens or aliens authorized to work in the US
Immigration Reform Act
a formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period
income statement / profit and loss statement / statement of operations / operating statement
the introduction of something new; a new idea, method, or device
innovation
the equitable transfer of the risk of a loss, from one entity to another in exchange for payment; it is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss
insurance
those assets that cannot be touched or grasped (examples include patents, copyrights, and goodwill)
intangible assets
those goods or stock of goods which are held for resale at a profit
inventory / merchandise
the number of times the average inventory has been sold or used up during a period
inventory turnover
the process of determining the critical components of a job for purposes of selecting, training, and rewarding personnel
job analysis
a document that lists the major responsibilities and tasks of the job
job description
a document that lists the knowledge, skills, abilities, and personal characteristics a job holder must posses to perform effectively
job specifications
life insurance that protects a firm against losses due to the death of a key employee
key-person life insurance
a relatively new form of business ownership (approved in most states since approximately 1994) which combines aspects of partnerships with the limited liability of a corporation; owners known as members
limited liability company (LLC) (note: not a corporation)
the anticipated value of an asset that would be realized in case of liquidation of the business
liquidation value approach
a document designed to communicate the organization’s goals for the future
long-range plan / strategic plan
the art and science of motivating people toward the achievement of a goal
management
a business that makes finished good from raw materials by hand or machinery
manufacturing business
a reduction of selling price below the original selling price
markdown
a group of potential customers possessing purchasing power and unsatisfied needs
market
the process of planning and executing the development, pricing, promotion, and distribution of an organization’s goods and/or services
marketing management
the process of planning and executing the development, pricing, promotion, and distribution of an organization’s goods/services
marketing
a study that is used by a business to determine where the potential customers are located
market survey
an approach used in business valuation which determines value based upon previous sales of similar businesses
market value approach
the difference between merchandise cost and selling price
markup
a business that purchases finished goods for resale
merchandising business
the process of energizing, channeling, and sustaining people’s behavior
motivating
the difference between gross profit and expenses when gross profit is larger
net income / net profit
federal legislation which created the governmental agency with the responsibility for regulation and enforcement of safety and health matters for most US employees; an individual state ____ agency may supersede the US Department of Labor ____ regulations
Occupational Safety and Health Act (OSHA)
a line of credit that may be used over and over again up to a certain borrowing limit
open-end credit / revolving account
a comparison of profit and expense items in the income statement expressed as a percentage of sales income; the operating ratios can be compared to the industry standards in regard to measuring the possible growth of the business
operating ratios
the process of assigning tasks, allocating resources, and coordinating the activities of individuals and groups to implement plans
organizing
expenses incurred in the normal operation of a business
overhead
the voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit
partnership
the registered right of an investor to make, use, and sell an invention
patent
the process of setting performance objectives and determining what actions should be taken to accomplish them
planning
factors which influence prices
pricing policy
insurance that protects a firm against claims that its product caused bodily injury or property damage to the user
product liability insurance
business owned by one person, who bears unlimited liability for the enterprise
proprietorship
quantitative evaluation of information contained in a company’s financial statements (i.e.d balance sheet, income statement, and cash flow statement, etc.) to determine the overall financial strength of a business
ratio analysis
the process of forming a pool of qualified applicants for tasks that need to be filled
recruitment
an insurance concept in which the fair market price to purchase similar products in similar condition is used to settle claims
replacement value approach
written summary of one’s personal, education, and professional achievements
resume
a probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities
risk
a process for identifying, assessing, and prioritizing certain kinds of events happening to or having an impact on a business with the intent to reduce or eliminate the risk
risk management
a type of corporation that offers limited liability to its owners but is taxed by the federal government as a partnership
S corporation
a plan which provides inducements to potential purchasers of products and/or services
sales promotion
a form of risk management whereby a part of the firm’s earnings is earmarked as a contingency fund for possible future losses, specifically for individual loss categories, such as property, medical, or worker’s compensation
self-insurance
a business that provides a service as opposed to a product
service business
a business which is independently owned and operated and is not dominant in its field of operations
small business
the principal government agency concerned with the financing, operation, and management of small business
Small Business Administration (SBA)
the process of selecting employees and assigning them to tasks in order to fulfill goals and objectives of the organization
staffing
new business ventures started “from scratch”
startups
those assets that can be appraised by value or seen or touched
tangible assets
a form of credit that is extended by one business to another business to help finance distribution of producer’s goods
trade credit
an intangible asset that is a distinct name, sign, or symbol that the federal government grants exclusive rights to use for a specified period of time
trademark
estimate of the worth or price of a company
valuation
a cost which is uniform per unit, but fluctuates in direct proportion to change in the related total activity or volume
variable expense
anyone that invests in, or financially sponsors, a new business
venture capitalist
outlaws discrimination in employment against Vietnam Era veterans
Vietnam Era Veterans Readjustment Act
coverage that provides benefits to employees injured at work
worker’s compensation insurance
the formal codification of land use policies by a unit of local government with the goal to establish permitted uses for land and to distinguish between different types of uses which may be incompatible
zoning ordinace
