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fm p6 Flashcards

1
Q

TWO PRIMARY SOURCES OF BUSINESS INFORMATION

A
  • External Information
  • Internal Information
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2
Q

in which documentation is made available to the public from a third party.

A

EXTERNAL INFORMATION

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3
Q

consists of data created for the sole use of the company that produces it, such as personnel files, trade secrets, and minutes of board meetings.

A

INTERNAL INFORMATION

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4
Q

VARIETY OF FORMS OF EXTERNAL
INFORMATION

A
  • PRINT INFORMATION OR PRINT RESOURCES
  • TELEVISION AND RADIO MEDIA
  • ONLINE INFORMATION
  • CD-ROM INFORMATION CD-ROM (compact disc read only memory)
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5
Q

Are hard copies of resources, like physical
books and newspaper.

A
  • PRINT INFORMATION OR PRINT RESOURCES
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6
Q

This source of business information is perhaps the least helpful of the various external sources available to small business owners.

A
  • TELEVISION AND RADIO MEDIA
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7
Q

“Large online systems can help overcome the incredible fragmentation of published information.

A
  • ONLINE INFORMATION
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8
Q

a popular alternative to online services.

A
  • CD-ROM INFORMATION CD-ROM (compact disc read only memory)
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9
Q

As the name implies, it is not so much an interactive system; in usage it is close to traditional print.

A
  • CD-ROM INFORMATION CD-ROM (compact disc read only memory)
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10
Q

meaning of CD-ROM

A

compact disc read only memory

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11
Q

Is studying the external factors that affect a business.

A

BUSINESS ENVIRONMENTAL ANALYSIS

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12
Q

This includes things like the political landscape, the economic conditions, the technological environment and more.

A

BUSINESS ENVIRONMENTAL ANALYSIS

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13
Q

Refers to the factors or forces that influence the operations and growth of organization.

A

BUSINESS ENVIRONMENTAL ANALYSIS

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14
Q

TYPES OF BUSINESS ENVIRONMENT

A
  1. INTERNAL ENVIRONMENT
  2. EXTERNAL ENVIRONMENT
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15
Q

are factors within a company that affect growth and profitability.

A

INTERNAL ENVIRONMENT

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16
Q

As something the business can control, it can be changed to produce the desired results Internal factors that influence the business environment include company culture, organizational structure, physical resources and HR policies and processes.

A

INTERNAL ENVIRONMENT

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17
Q

is comprised of forces around the business that affect growth and profitability.

A

EXTERNAL ENVIRONMENT

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18
Q

Businesses can’t control them and therefore can’t change them

A

EXTERNAL ENVIRONMENT

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19
Q

TWO GROUPS OF EXTERNAL ENVIRONMENT

A

A. MICRO ENVIRONMENT
B. MACRO ENVIRONMENT

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20
Q

This directly impact your organization’s
daily operations.

A

MICRO ENVIRONMENT

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21
Q

They are your distributors, competitors,
consumers and the general public.

A

MICRO ENVIRONMENT

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22
Q

impact your organizations decisions.

A

MACRO ENVIRONMENT

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23
Q

They are political economic, social and technological spheres.

A

MACRO ENVIRONMENT

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24
Q

PESTLE MODEL OF BUSINESS ENVIRONMENT
ANALYSIS

A

a. POLITICAL
b. ECONOMIC
c. SOCIAL
d. TECHNOLOGICAL
e. LEGAL
f. ENVIRNONMENTAL

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25
is effective because it gives businesses the bigger picture of their environment.
PESTLE
26
It identifies the key environmental elements that impact business decisions, unlike the SWOT analysis.
PESTLE
27
involves factors related to government action.
POLITICAL
28
impact business growth directly.
ECONOMIC
29
Include inflation, foreign exchange, income per capita, GDP and unemployment rates.
ECONOMIC
30
These affect consumers’ buying power.
ECONOMIC
31
consists of societal values, traditions, attitudes and behaviors.
SOCIAL
32
entails the use of machines and software to improve modes of production and product quality.
TECHNOLOGICAL
33
It touches every part of businesses, and the rate of advancement is astonishing.
TECHNOLOGICAL
34
refers to national laws, government policy, and industry regulations that affect how businesses work.
LEGAL
35
Include licensing, consumer protection laws, employment laws and intellectual property.
LEGAL
36
ecological environment refers to the physical world, such as climate, water bodies, land masses and animal.
ENVIRONMENTAL
37
Allows companies to maximize their profit.
PROFITABILITY ANALYSIS
38
Helps businesses identify growth opportunities, fast/slow-moving stock items, market trends, etc, ultimately helping decision-makers see a more concrete picture of the company as a whole.
PROFITABILITY ANALYSIS
39
Profitability analysis lets you do the following:
a. Analyze sales data to identify the most and least profitable products and services. b. Evaluate performance over time by comparing current data with historical data. c. Compare your company's performance with competitors in the same industry.
40
2 TYPES OF PROFITABILITY ANALYSIS
1. MARGIN RATIOS 2. RETURN RATIOS
41
To understand your company’s financial status during a specific period, it is imperative to understand your company’s ability to convert sales into profits.
MARGIN RATIOS
42
is nothing but the company’s ability to generate returns to its shareholders.
RETURN RATIOS
43
Four Types of Margin Ratios
1. Gross profit margin 2. Operating profit/Earnings before interest and taxes (EBIT) margin 3. Net Profit Margin 4. Cash Flow Margin
44
This expresses the percentage of revenue that businesses retain as profit.
Gross profit margin
45
reveals how much profit they retain after paying operational expenses but before paying interest and taxes.
Operating profit/Earnings before interest and taxes (EBIT) margin
46
indicates the quality of management and operating efficiency of a business.
Operating profit margin
47
reveals the percentage of revenue retained as profit after paying both operating expenses, taxes, and interest.
Net Profit Margin
48
It's the most commonly used profitability ratio since it reveals how much money is left after costs.
Net Profit Margin
49
expresses what percentage of revenue is liquid.
Cash Flow Margin
50
means that businesses have more liquidity.
high cash flow margin
51
measures the percentage of profit earned from a financial investment.
RETURN ON INVESTMENT (ROI)
52
can be broadly used for different types of investments, including in stocks, business assets, and other securities.
RETURN ON INVESTMENT (ROI)
53
means an investment will yield higher profits relative to the amount invested. But it does not represent the absolute gain from an investment.
higher ROI
54
Informs how much profit a business generates for its shareholders.
RETURN ON EQUITY (ROE)
55
Investors prioritize this ratio since it tells them what return to expect from an investment.
RETURN ON EQUITY (ROE)
56
measures the percentage of return a business produces from existing assets.
RETURN ON ASSETS (ROA)
57
LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS
a. Quality of underlying data b. Standalone analysis c. Historical figures + assumptions = projections d. Timeliness/relevance e. Qualitative factors
58
The accuracy of the analysis depends on the accuracy and genuineness of the financial statements.
Quality of underlying data
59
Financial statement analysis is based on past data and assumptions, which may not be accurate in the future.
Historical figures + assumptions = projections
59
Financial statement analysis does not take into account the external factors that may affect the company's performance.
Standalone analysis
60
Financial statements may not be up-to-date or relevant to the current situation.
Timeliness/relevance
61
Financial statement analysis does not take into account qualitative factors such as management quality, employee morale, and brand value.
Qualitative factors

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