Vocab Flashcards
Risk avoidance
Used when a business anticipates risk and refrains from certain business activities in order to avoid the risk
Financial resources
Funds available to a business or person spending in the form of cash, credit or securities
Financial ratio
Financial ratios provide a comparison between financial statement items to determine the strength or weakness of a company. The most common ratios are: net cells to net worth, and net income to net sales
Capital expenditures
The amount spent to acquire or upgrade an asset that will increase the efficiency of the production or operations of a business for the long-term
Securities information
Information provided regarding an investment instrument issued by a corporation, government or other organization that demonstrates whether it is debt or equity
Financial goal
Monetary objectives of an individual, business or other organization that are decided by future needs of those entities
Invest
Any activity where money is put at risk in the short term for the purpose of creating a profit in the long term. Most investment activities include conducting research and developing long-term plan for any assets that will be put at risk. Investment activities want to create and/or increase a positive outcome for the benefactor
Savings
The portion of disposable income that is not spent on essential expenses in a household or business. a variety of savings vehicles are available to increase the value savings, including a bank savings, account, stocks, bonds, etc.
Marginal analysis
A decision making tool that compares the cost of an activity versus the benefits of the activity
Social Security (FICA)
A tax paid by workers so that they may receive benefits upon retirement
Internal audit
An examination of an organization’s financial statements that is conducted by an employee of the organization
Insurance
A contract between a business and the insurer that covers a specific business risk
Database
The systematic organization of information that allows easy updating in analysis of data
Inventory system
An inventory system allows a business to maintain the optimum number of each item. In doing so, a business can operate production of a good or service, sales or customer service at a lower cost.
Business law
Laws that govern businesses and transactions between businesses
Debtor
A person or business that owes money, goods or services to another
Risk retention
A strategy in which an entity set aside a sum as a protection against probable loss, instead of transferring the risk by purchasing an insurance policy
Capital market
A market for demand and supply of debt and equity capital. This is a highly decentralized system made up of three major parts: the stock market, bond, market and money market
Exchange rate
The value of one currency in terms of another, established on the foreign exchange market
Voluntary compliance
The assumption that taxpayers will stay in compliance with tax laws and accurately report their income amounts and tax deductions fairly and honestly
Equity
Includes earnings that a company has retained and the amount of funds invested in that company by its owners
Just-in-time inventory
An inventory management method that coordinates the demand and supply for goods, delivering them just before they are needed
Estate tax
A tax paid on wealth, collected after that person has died
Inflation
Refers to rising prices and is an indicator of the stability of an economy
Commodities exchange
An open and organize marketplace where ownership titles or standard units of commodities are traded by its members
Indirect costs
Those costs which cannot be directly linked to a good, service or project
Information management
The process of collecting and analyzing data that be used in strategic decision making process for a business
Differential cost
The difference in cost between two or more business decisions
Transaction
An agreement or contract that occurs between two or more parties and establishes a legal obligation. This can also be defined as an exchange of goods or services between a buyer and a seller.
Client
A customer of a professional service provider or the primary contractor
Tax
Payment made to the government for services they provide
Perpetual inventory system
An inventory system that continually keeps track of the number of items in inventory, and can be done manually or by computer
External audit
An examination of an organization’s financial statements by an independent accountant, not affiliated with the organization
Creditor
The entity that provides available capital resources to debtors, in exchange for compensation
Income tax
Calculated as a percentage of the taxable income workers earn while on the job
Risk transfer
A strategy in which an insurance risk is shifted to another party (the insurer) by means of an insurance policy
Data mining
Reviewing very large amounts of data for useful information. This activity often uses advanced statistical tools to determine trends, patterns and relationships. Data mining can also be referred to as data surfing.
Financial position
The status of the assets, liabilities and owner’s equity of an individual, business or other organization as shown, and it’s financial statements
Inventory management
The process of buying and storing materials and products while controlling costs