review part 2 Flashcards
employee stock ownership
allows employees to purchase shares in the company where they work as part of their retirement package. Shares may be held within pension plans or registered retirement savings plans, with the associated tax benefits. In some cases, provincial tax credits are also available.
management buyout
a group of employees, led by a management team, arranges to purchase a controlling in a company. Some merchant bankers and venture capital funds specialize in funding this type of purchase
redundant assets
assets owned by a business that are not necessary for it to produce profit at current or projected levels
personal service contract
An agreement contracting with an individual rather than a company to perform service that is generally not transferable to another individual or business
core business
the products and service and market segments that produce most the company’s profit
outsource
Find suppliers outside of a company to provide certain products or services that the company formerly produced internally.
kay ratio
A financial indicator for a company, obtained by dividing one specific value from the company’s financial statements by another specific value from those statements
liquidty
The ability of a company to pay its short-term financial obligations
solvency
The ability of a firm to pay all its financial obligations (short and long term)
rule of thumb pricing
using a ratio showing a relationship between the average price of a business in a field and some other factor such as profit to calculate the price for a specific company
skimming cash
The illegal removal of unreported cash from a business to avoid paying tax on that income
franchisor
A company that sells the rights to duplicate its system and style of doing business or to distribute its products and services
franchisee
An individual or company that purchases the rights to distribute the products of or use the intellectual property and business style of another company
licensing
The selling of the right to product and distribute a brand of product or service
multi level marketing
A form of franchising where products are distributed through independent direct sellers, who can recruit subordinate levels of sellers and earn commissions on the sale of those subordinate levels
pyramid selling
Illegal forms of multi-level to recruit salespeople and being forced to buy unreasonable amounts of inventory
brand
The name of a company or a trademark-protected word that identifies the company and that creates a specific image in the minds of consumers
turn key
Operations that are ready to go, with all set-up and preparation completed. You just “turn the key” and it goes
family business
A company where controlling interest is held within a single family and at least two members of the family work for the business
family benefits
Fringe benefits paid for by many employers and that are extended to the spouse and dependent children of the employee. Such benefits typically include extended health care, dental care and various types of life and disability insurance
delegating
Giving subordinates responsibility and full authority of completing specific tasks
family council
A group of family members who meet regularly to receive information about and discuss concerns relating to the family business. Council members do not generally have any active involvement in the business and have no authority over the business
succession
taking over of control by the next in line to do so
capital gain
The increase in value of an asset over a period
niche
A very small market segment that a business satisfies with specialized products or services
100% capacity
the maximum amount of sales or production that a company could generate in a year as the company currently stands in terms of space, equipment, and employees
SWOT analysis
research and drawing conclusions about the strengths and weaknesses of a company as well as about the opportunities and threats it faces
market share expansion
Growth by selling more of the same products and services that a business is already selling to the same customer groups that the business already targets; capturing a greater portion of the market potential
product/service expansion
Growth by selling new products and/or services to the customer groups that business already targets
market segment expansion
Growth by selling the products and service that a business already offers to new groups of customers
product life cycle management
Methods and systems for organizing and sharing product-related information that can affect the length of time a product can be viable
free on board (FOB)
The point the shipping process to which the seller bears all the costs and risks
importer of record
They party specified as being responsible for paying duties and ensuring that traded goods follow customs regulations
subordinate financing
A hybrid form of financing involving features of both debt and equity but for which the debt is usually ranked below the claims of other secured creditors
payback period
the length of time it takes to recoup the amount of an investment
projected ROI
the additional annual profit expected from a new investment, divided by the total cost of the investment
return on sales
the ratio of net profit to sales, usually expressed as a percentage
return on assets
the ratio of net profit to total assets, usually expressed as a percentage
inventory turnover
the ratio net profit to total assets, usually expressed as a percentage
collection period
The ratio of accounts receivable to the average sales per day
gross margin
The ratio of gross profit to sales, usually expressed as a percentage
customer retention
Maintaining the loyalty of existing customers for repeat sales
customer relationship management
Customer relationship management is marketing information technology strategy that monitors customers and classifies them into different categories, giving special treatment to those groups of customers that provide the most profit
succession planning
The identification and grooming of specific employees for future promotion to specific areas in the organization
activity based costing
A method of apportioning overheard to a job by breaking the job down into detailed activities, each of which has a specific overhead cost
intrusion prevention systems
real-time network security systems that can detect and disconnect from sources attempting to invade a system while the malicious activity is in progress
novice entrepreneur
Own all or part of a single business which is the only firm they have ever had ownership in
serial entrepreneurs
own all or part of a single business, but have been an owner of at least one other business in the past
portfolio entrepreneurship
currently own all or part of at least two independent firms
gazelle
Rapidly growing small business
co-operative enterprise
A company whose primary purpose is to provide work and incomes for the employee owners
co-opetition
When competing businesses collaborate for their mutual benefit
microfinance
The lending borrowing and management of small amounts of money in small enterprises
micro management
Getting involved in extremely minor decisions of subordinates, often second-guessing or overruling the subordinate’s decisions
