Quiz Flashcards
Accepting the risk of starting and running a business
Entrepreneurship
Launching a new venture: what’s in it for me
Greater financial success
Independence
Flexibility
Challenge
Opportunity and threats for small business
Market niches
Personal customer service
Lowest overhead cost
Technology
Sources of capital
Personal savings Relatives Formed employers Banks and finance companies Gov agencies Angel investors
Individuals or companies that invest in new business exchange for partial ownership
Venture capitalist
Pros and cons to buying a franchise
Pros- Partnering with established brand Possibility of assistance with management and finance Low failure Cons- Less creativity Tied to mistakes Purchase price and ongoing royalties can be steep
The function in a business that acquires funds for a firm and manages them within the firm
Finance
Finance activities
Preparing budgets
Create cash flow analysis
Plan for expenditures
The job of managing a firms resources to meet its goals and objectives
Financial management
Why do firms fail financially
Undercapitalization
Poor control over cash flow
Inadequate expense control
Highlights a firms spending plans for major asset purchases that often require large sums of money
Capital budget
Estimates cash inflows and outflows during a particular period like month or quarter
Cash budget
Ties together all the firms other budgets and summarizes its proposed financial activities
Operating budget
Unsecured promissory notes in amounts of 100,000 plus that come due in 279 days or less
Commercial paper
Short term ious issued by gov. Mature in 4,13,26 weeks
T bills
Pooled funds to purchase a portfolio of short term liquid securities. Affordable for small investors
Money market mutual funds
Money which is owed to a company by a customer for products and services provided on credit
Accounts receivable
Earning interest in the current period on interest from previous periods
Compounding
A dollar received today is worth more than a dollar received in the future
time value of money
Functions of security markets
Assist business in finding long term funding
Provide private investors a place to buy and sell securities
Handle sale of new securities
Primary market
Handle the trading of securities between investors with the proceeds going to seller
Secondary markets
The first offering of a company’s stock
Initial public offering
Shares of ownership in a company
Stock
