FINAL EXAM Flashcards by Bri A

Tax-differed investment plan that enables you to save part of your income for retirement plan that enables you to save part of your income for retirement

IRA- individual retirement account

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The type of investment plan established for you by and employer that enables you to save part of your income each year, presently up to 17,500 annually, often with some level of matching contributions by the employer, and that permits an up-front tax deduction for the amount you invest each year

401K

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Type of tax-deferred investment plan that enables a self-employed person to save part of his or her income towards retirement each year, presently limited to the lesser of 25% of the person’s net income or $53,000

Keogh Plan

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Type of personal investment plan that enables you and you spouse to save part of your income each year, presently up to $5,500 per year each, towards retirement but which does NOT permit an up-front tax deduction in exchange for not having to pay taxes on withdrawals during retirement

Roth IRA

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Accepting the risk of starting and running a business

Entrepreneurship

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A firm or individual that invests financial capital in small businesses in enhance for an equity stake in the small business and which often invests in relatively high-risk but high-potential return

Venture Capitalist

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The form of business that gives its owner the legal right to use a specific business’ name and sell its products or services in a given territory

Franchise

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A business that is owned, and usually managed, by one person

Sole Proprietorship

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Legal form of business with two or more owners

Partnership

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Center that offers entrepreneurs and new businesses low-no cost office and warehouse space along with basic business services

Incubator

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Company develops a product concept and sells others the right to make and sell the products

Franchisor

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Promotional strategy in which promotional efforts are focused on the end consumers of a product so that they will request the product from retailers and the retailers will then seek to obtain the product from its manufacturer

Pull

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Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, ands society at large

Marketing

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Combined components of product, price, place, and promotion that together forms the structure of a marketing strategy

Marketing Mix

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Dividing all of the potential consumers in the total market into groups whose members have similar characteristics

Market Segmentation

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Marketing promotional strategy that carefully combines all of the various categories of marketing promotional tools into a single, focused, comprehensive, and highly unified promotional strategy

Integrated Marketing Communication System

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Process that allows marketers to go beyond a monologue, where sellers try to persuade buyers to buy things, to a dialogue in which buyers and sellers work together to create mutually beneficial exchange relationships

Interactive Marketing Communication System

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Process of overseeing and planning new product development, advertising, promotions and sales.

Marketing Management

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Producer uses ads, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise

Push Strategy

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Paid, non personal communication through various media by organizations

Advertising

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Marketing promotional strategy that is non personal and that is intended to distribute a message to consumers through the media via channels that are neither directly paid for nor directly controlled by the sponsor

Public Relations

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Gaining public visibility or awareness for a product, service, or your company via the media

Publicity

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Form of marketing data collection in which a business owner gathers information that has already been compiled

Secondary Market Research

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Theoretical model of what happens to sales and profits for a product class over time (intro, growth, maturity, decline)

Product Life Cycle

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Shows a firm's profit after costs, expenses, and taxes

Income Statement

One or more general partners and one or more limited partners

Limited Partnership

Partnership that looks much like a corporation (in that it acts like a corp and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax

Master Limited Partnership

Unique govnt creation that looks like a corp but is taxed like a sole proprietorship and partnership

S Corp

Legal entity with authority to act and have liability apart from its owners

Corporation

Most basic form of ownership in a firm; has voting rights, rights to share in profits through dividends, if offered

Common Stock

Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stock holders if the company sells its assets

Preferred Stock

Gives the holder the right to receive dividends equal to the normally specified rate that preferred dividends receive as well as an additional dividend based on some predetermined condition

Participating Preferred Stock

Preferred stock that includes an option for the holder to convert the preferred share into a fixed number of common shares

Convertible Preferred Stock

Preferred stock whose annual fixed-rate dividend, if it cannot be paid in any year, accrues until it can and is paid before common dividends

Cumulative Preferred Stock

Corporate certificate indicating that a person has lent money to a firm

Bond

Bond issued by a corporation in order to raise financing for a variety of reasons (usually for longer-term debt and matures within a year)

Corporate Bond

A security issued by or on behalf of a local authority; usually exempt from federal taxes

Municipal Bond

A security issued by a US govnt-sponsored agency or federal budget agency (backed by govnt)

Agency Bond

Not secured by physical assets or collateral- backed by creditworthiness and reputation of the issuer

Debenture

Bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash equivalent

Convertible Bond

Bond bought at a price lower than its face value, with face value repaid at the time of maturity

Zero Coupon Bond

Debt secured by the issuing entity's real estate or equipment. If the issuer defaults on the bond, the property collateral is paid over to the bond holders. This extra security typically equals lower interest.

Mortgage Bond

Matures in less than a year; minimum denomination of $1,000

T-Bill

Matures in 10 years or less; sold in denominations of $1,000-$1,000,000

Treasury Note

Matures in 25 years or more; denominations of $1,000-$1,000,000

Treasury Bond

Regional bank of the federal reserve system, the central banking system of the US

Federal Reserve Bank

Central bank regulation employment by most, but not all, of the world's central banks, that sets the minimum fraction of customer deposits and notes that each commercial bank must hold, rather than lend out

Reserve Requirement

Interest rate that the Fed charges for loans to member banks

Discount Rate

The buying and selling of US govnt bonds by the Fed with the goal of regulating money supply

Open-Market Operations

The average cost of 30 selected industrial stocks, used to give an indication of the direction of the stock market over time

Dow Jones Industrial Average

Federal agency that has responsibility for regulating the various exchanges

Securities & Exchange Comm (SEC)

Exchange that provides a means to trade stocks not listed on the national exchanges

OTC Market (Over-the-counter)

Most any buyer will pay ______ | Least any seller is willing to accept ______

Bid | Asked

Represents the capital received from investors in exchange for stock

Statement of Shareholder's Equity

Assets, liabilities, and owners' equity- reports a firm's condition

Balance Sheet

Shows how changes in the BS and income affect cash

Statement of Cash Flows

Evaluation and unbiased opinion about the accuracy of a company's financial statements

Independent Auditor's Report

Accounting information and analyses prepared for people outside of the organization

Financial Accounting

Process of identifying, measuring, analyzing, interpreting, and communicating information

Managerial Accounting

Framework of accounting standards, rules and procedures in the US

GAAP (Generally accepted accounting principles)

Accounting professional

CPA (Certified public accountant)

Professional designation in the accounting and finance world

CMA (Certified management accountant)

Total value of goods and services by a country during one year (equal to GDP plus the net income from foreign investments)

Gross National Product

Total value of goods and services in a country during one year

Gross Domestic Product

Entering work force or change of career

Frictional Unemployment

Unemployment caused by restructuring or mismatch between skills

Structural Unemployment

Occurs bc of a recession or similar downturn

Cyclical Unemployment

Labor varies over the year

Seasonal Unemployment

Monthly statistics that measure the pace of inflation or deflation

Consumer Price Index

Index that measures prices at the wholesale level

Producer Price Index

Selling products to another country

Exporting

One company gives another company permission to manufacture its product for a specified payment

International Licensing

License that allows a franchisee to have access to a business' proprietary knowledge and trademarks to provide a service under the business' name

International Franchising

Controlling ownership in a business enterprise in one country by an entity based in another country

FDI (Foreign Subsidiary)

Form of bartering where several countries may be involved in trading goods for good or services for services

Countertrading

Nationwide electronic system that communicated oTC trades to brokers

NASDAQ (National association of securities dealers automated quot. system)

Leadership style that involves making managerial decisions without consulting others

Autocratic Leadership

Consists of managers and employees working together to make decisions

Participative (Democratic) Leadership

Leaders are hands-off and allow group members to make the decisions

Laissez-faire (Delegative) Leadership

Mngt function that includes anticipation trends and determining the best strategies and tactics to achieve organizational goals and objectives

Planning

Mngt function that includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization's goals and objectives

Organizing

Creating a vision for the organization and guiding, training, coaching, and motivating other to work effectively to achieve the organizations goals and objectives

Leading

Mint function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not

Controlling

- employees dislike work and avoid it - they prefer to be controlled and directed - they seek security, not responsibility - managers must intimidate them - they are motivated strictly by financial rewards

Theory X

- work is a natural part of life - employees prefer limited control and direction - will seek responsibility under proper work conditions - perform better in non-intimidating environments - motivated by different needs

Theory Y

- increased employee involvement is the key to increased productivity - control is implied and informal - prefer to share responsibility and decision making - perform better in environments that foster trust and cooperation - need job security and will accept slow eval and promo

Theory Z

Employers/supervisors manage their subordinates by introducing a set of specific goals that both the employee and the company strive to achieve in the near future

Management by Objectives

Deviations from a budget or plan are grout to the attention of management and they will focus on areas needing action

Management by Exception

interpersonal- figurehead, leader, liaison informational- monitor, disseminator, spokesperson decisonal- entrepreneur, disturbance handler, resource allocator, negotiator

Minzberg's Managerial Roles

- achievement - recognition - the work itself - responsibility - advancement - growth

Herzberg's Motivating Factors

Division of work and authority, unity of command and direction, esprit de corps

Universal Process Approach

- Frederick Taylor's "principles of scientific management" in 1911 - Focused on time, motion, rules of work, and efficient work methods - Gilbreth made the assembly line

Operational Approach

Hawthorne studies, theories x, y, and z

Behavioral Approach

Tendency for people to behave differently when they are being studied

Hawthorne Effect

1) strong leadership, bias toward action 2) extreme customer focus 3) autonomy, innovation, and entrepreneurship 4) people focus

Attributes of Excellence

5) hands-on, value driven organizational philosophy 6) stick to the knitting 7) simple form & lean staff 8) simultaneous loose-tight properties

Attributes of Excellence

- focuses on the concept a corp is a "closed ecosystem" in which any changes cause a ripple effect - emphasizes analysis of impact

Integrated Systems Approach

- work place is a fluid environment and changes so rapidly its impossible to do long-term planning - incorporates strategic planning and consultant analysis of business missions or objectives

Contingency Approach

William Ouchi - high employee involvement creates commitment - informal and relaxes management interaction - want responsibility (motivational) - job security - slow evaluation and promotion

Japanese Approach

Summary of job objectives

Job Description

Qualifications for employees

Job Specification

Money from within a firm

Equity Financing

Funds raised outside of a firm that must be repaid

Debt Financing

Buy low, sell high

Long Trading

Sell high, buy low

Short Trading

Buy with partial down payment

Margin Trading

Exercise date to finalize trade

Options Trading

Stock value stated in the corporate charter

Par Value

Value at which an asset is carried on a balance sheet

Book Value

Price an asset takes in the marketplace

Market Value