Fundamental Concepts and Tools of Business Finance Flashcards

1
Q

May be defined as the study of the acquisition and investment of cash for enhancing value and wealth.

A

Finance

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2
Q

deals with the revenue and expenditure patterns of the government

A

Public Finance

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3
Q

deals with the revenue and expenditure patterns of the government, individual and businesses

A

Private Finance

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4
Q

Is concerned with the fundamentals of managing one’s own personal money affairs.

A

Personal Finance

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5
Q

Includes private undertakings such as charity, religion, and some private educational institutions.

A

Finance of non-profit organization

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6
Q

It refers to the provision of money for commercial use.

A

Business Finance

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7
Q

The Goals of Business Finance

A
  1. Maximizing profit
  2. maximizing profitability
  3. maximizing profit subject to cash constraint
  4. maximizing net present worth
  5. seeking an optimum position along a risk- return frontier.
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8
Q

Concerned with Business Finance

A

Small Business Finance
Corporation Finance
Multinational Finance

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9
Q

2 type of Finance

A

Public Finance
Private Finance

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10
Q

Means realizing the highest possible peso or dollar income.

A

Maximizing Profit

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11
Q

This concept indicates that money increases in value with the passing of time .

A

Time value of money

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12
Q

Can set a goal of achieving the best possible combination of risk and return.

A

Firm

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13
Q

Are those that present financial information to various interested parties.

A

Financial Statement

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14
Q

Is the statement produced periodically , normally at the end of a financial year, showing an organization’s assets, liabilities, and the interest of the owners.

A

The balance sheet

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15
Q

The assets section of the balance sheet shows everything that the firm owns and which has the monetary value.

A

Assets

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16
Q

Type of Assets

A

Current Assets
Trade Investment
Fixed Assets
Intangible Assets

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17
Q

These are composed of cash, bank deposits, and other items readily convertible into cash like accounts receivable, stocks and work-in-process, and marketable securities;

A

Current Assets

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18
Q

These are composed of investments in subsidiary or associated companies;

A

Trade Investment

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19
Q

These items show the firms ownership of property like land, buildings, plan and machinery, equipment, vehicles, furniture and fixtures, all valued at cost less depreciation written off;

A

Fixed Assets

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20
Q

These items present goodwill, patents, copyright which are attributed to the firm.

A

Intangible Assets

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21
Q

It shows the profile of the debts of the company. They are classified into several items:

A

Liabilities

22
Q

These are usually composed of debts payable within a few days, weeks , or months, like those incurred in the purchase of raw materials and stocks.

A

Account Payable

23
Q

These are debts evidenced by promissory notes and oftentimes backed up by collateral.

A

Loans and Notes Payable

24
Q

Sometimes, customers are required to make down payments before orders are processed.

A

Advances from Customers

25
These represent obligations, which have been incurred but not yet paid.
Accrued Expenses
26
This comprises borrowings and other sources of funds. This item also represents long-term debts and is usually secured by land, buildings , or equipment.
Mortgage Payable
27
When a large amount of long –term debt is sought by the firm from a large number of creditors, bonds are usually issued.
Bonds Payable
28
Awareness of the environment where the business operates provides a better perspective to the one making decisions relating to the finance function.
Financial Markets
29
It refers to lending by ultimate borrowers with no intermediary.
Direct Finance
30
refers to the selling of securities by private negotiation directly to insurance companies, commercial banks, pension funds, large –scale corporate investors, and wealthy individual investors.
Private Placement
31
is one who acts an intermediary between buyers and sellers but does not take tile to the securities traded.
Broker
32
is one who is in the security business acting as a principal rather than an agent. The dealer buys for his account a
Dealer
33
refers to lending by an ultimate lender to a financial intermediary that then relends to ultimate borrowers.
Indirect Finance
34
Classification of Financial Markets
1. Primary market 2. secondary market 3. money market 4. capital market 5. bond market 6. stock market
35
Four P's
Product Price Promotion Place
36
Four C's
Customer Solution Consumer Cost Communication Convenience
37
The Celling Concept
FACTORY - EXISTING PRODUCTS - SELLING AND PROMOTION - PROFITS THROUGH SALES VOLUME
38
The Marketing Concept
MARKET - CUSTOMER NEEDS - INTEGRATED MARKETING - PROFITS THROUGH CUSTOMER SATISFACTION
39
The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organization objectives.
Marketing Management
40
describe basic human requirements.
Needs
41
are shaped by one’s society.
Wants
42
are wants for specific products backed by ability to pay. examples
Demands
43
is a trade between two parties that involves at least two things of value, agreed-upon conditions a time of agreement, and a place of agreement.
Transaction
44
is the act of obtaining a desired object from someone by offering something in return.
Exchange
45
The process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.
Relationship Marketing
46
Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfying a want or need. It includes physical objectives, services, persons, places, organizations and ideas.
Product
47
any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
Service
48
Marketing Philosophies
The production concept The product concept The selling concept The marketing concept The societal marketing concept
49
Consumers prefer products that are widely available and inexpensive
Production Concept
50
Consumers favor products that offer the most quality, performance, or innovative features
Product Concept
51
Consumers will buy products only if the company aggressively promotes/sells these products
Selling Concept
52
Focuses on needs/ wants of target markets & delivering value better than competitors
Marketing Concept