Business Principles & Practices Flashcards
What is ethics?
A D or Sy of MP gov h a and Int; R or W of A and G or B of M
A discipline or system of moral principles governing human action and interactions. It deals with the rightness or wrongness of actions and the goodness or badness of motives and ends.
What are three types of service environments?
PA….s-pa……and pf
Public areas;
Semi-public areas; and
Private facilities and property.
What are the three factors psychologists indicate commonly motivate individuals to commit unethical or dishonest acts?
D…….R…..O
Desire…..rationalization……and opportunity.
The income statement provides a ___________ view of an organization’s operations over a defined period.
Quantified
The balance sheet summarizes an organization’s investing and financing based on the underlying equation?
Assets = Liabilities + shareholder equity
The cash flow statement reveals what about an organization?
NOCF
NICF
FCF
Net operating cash flow, net investing cash flow and financing cash flow.
What does EBITA stand for?
Earnings before interest, taxes and amortization.
What does ORMS stand for?
Organizational Resilience Management System
The Organizational Resilience Management System impacts what part of an organization?
The organization’s overall risk and business management strategy.
What is NOT one of the five basic functions of management?
Safety and security
What expense categories must be considered when developing a budget?
Salaries….operational expenses….and capital expenses.
What are two types of cost avoidance?
Major loss prevention and other loss preventions.
What are the four categories for security data analysis.
- Proof of loss
- claims avoided
- assets recovered
- uninsured claims and other actions.
Name two of the five elements of an incident reporting system?
Statement of enterprise policy;
Functions of an incident report
Benefits of incident reporting
Incident database
Management reporting from the database
What is the value of incident reporting?
The opportunities it creates for avoiding future losses through planning, employee training and security enhancements.
Name three parts of protection planning without an incident database?
-Form a committee,
-determine criteria for events and incidents,
-identify vulnerable items to develop a system for item tracking,
-assess vulnerability,
-select countermeasures,
-create a cost-benefit model
The type of ethics most relevant to business is…?
Applied ethics
Business ethics can be applied at what three levels?
The individual….the organization and the society
What are four key reasons for poor ethical choices?
Convenience, winning, narcissism and relativism
What are the seven measures which can be used to judge contract security agencies?
Personnel;
training;
supervision;
wages and benefits;
insurance;
operational issues; and
cost of service
What five rolls can security officers play?
- Management representative
- intelligence agent
- enforcement/compliance agent
- legal consultant
- physical security/crime prevention specialist
What is the first step in establishing a financial strategy?
Identify expected margins or profit.
An income statement shows?
A quantified view of an organization’s operations over a defined period.
- How much money it generates (revenue)
-How much it spends (expenses)
-The difference between those figures (net income)
Net income is?
Revenue minus expenses
Categories of expenses include?
- Cost of goods sold;
- sales and marketing;
- administrative;
- interest; and
- taxes
Shareholder equity is derived from?
- retained earnings;
- net income, and
- dividend payout
The balance sheet and income statement together show the company’s operations, financing and investments, but do not show?
Where cash is being allocated….that comes from the cash flow statement.
Net operating cash flow?
The amount of cash generated or consumed through company operations.
Net investing cash flow?
The amount of cash generated or consumed by investing in other organizations or selling or acquiring buildings or property.
Financing cash flow?
If a company obtains a loan or other financing, the cash generated is reported as financing cash flow.
Gross profit margin provides insight into?
The efficiency of manufacturing a product….by measuring profit based strictly on sales and cost of goods sold. The higher the GPM, the more efficient a company is at producing a product.
Operating margin?
Demonstrates the company’s overall operating efficiency in producing and selling a product
Net profit margin?
Summarizes the net income as a percentage of sales. The higher the net profit margin, the more profitable the company is in its business.
Return on equity?
Indicates how well a company uses financial assets to generate income. In effect, how effectively a company uses loans to generate a profit.
Return on Assets?
Demonstrates the company’s ability to generate income based on its assets, independent of any financing
Two ratios that demonstrate how well a firm has done in making money for a reporting period are?
Return on Assets and Return on Equity
Two earnings-related ratios commonly examined in financial analysis are?
Earnings per share (EPS) and
Price to Earnings (P/E)
These ratios are helpful in determining whether a company is meeting profit targets. They can be compared to other companies, compared across an industry, and compared to past and future ratios.
Earnings Per Share (EPS)
How much income or loss is generated per share of the organization.
Price to earnings (P/E)
A useful metric to determine whether an organization is fairly valued.
Financial risk analysis
Deals with current or projected numbers that are derived directly from an organization’s financial decisions. It focuses on whether a company will be able to cover expenses and operating costs in the near term as well as the long term.
Financial risk analysis ratios include?
The current ratio;
The quick ratio; and
The debt to equity ratio
Current ratio
Examines a company’s ability to cover short-term obligations. If it’s greater than one, the company can cover all its current liabilities with its current assets….assuming the current assets can quickly be converted to cash equivalents. Inventory, for example, is not quickly converted to cash in most situations.
Return on Investment
A standard profitability ratio - also called return on equity - that measures how much net income the business earns for each dollar invested. It is an effective way to compare the desirability of different ways of spending. The return on security and research, for example, are not easy to quantify.
How can the return on an effective security countermeasure be demonstrated?
By applying an efficiency versus cost…..or cost versus benefit…..ratio to show the long-range cost savings to the company. Insurance premiums may also be lower.
What does an ORMS do?
An organizational resilience management system communicates a shared vision, purpose, and core values supporting strategic, operational, tactical and reputational objectives that provide direction for decision making at all levels.
What does it mean to be a resilient organization?
Efficiently tapping into the company’s human, tangible and intangible resources.
WAECUP?
Used as a blueprint for developing security objectives:
Waste
Accidents
Error
Crime
Unethical practices
SWOT Analysis?
Analyzes an issue from four points of view - strengths, weaknesses, opportunities and threats - giving a security manager many potential issues to deal with.
STEP Model?
Points out potential sources of threats - social, technological, environmental and political - to determine whether such threats are likely and where they could come from.
What are the 5 core values of business ethics?
- Honesty
- responsibility
- respect
- fairness
- compassion
What is business ethics?
A field that examines moral controversies relating to business practices in any economic system.
What is an ethics code?
A statement of an organization’s shared values - accepted concepts and beliefs related to the organization’s responsibilities and ethical goals. It should be concise and straightforward.
A security services contract is a….?
Legal binding service level agreement (SLA).
