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Vet Year 1 > Business > Flashcards

Business Flashcards

1
Q

Going Concern

A

Company that has resources needed to continue operating for at least the next 12 months

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2
Q

Goodwill

A

Assets aside from hard assets that includes brand name, cliental, reputation adding on to cost of purchase

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3
Q

Liquidation

A

Process in law when company that is closing sells all its assets and distributes cash to secured creditors first (bank) and then to unsecured creditors

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4
Q

Bankruptcy

A

Permits honest but unfortunate person to obtain relief from their debts while treating creditors equally and fairly. (if liabilities is more than things you own) =fresh start

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5
Q

Opportunity Cost

A

Value of the most valuable choice not taken, or the cost of the foregone alternative
Ex. if the business is deciding whether to purchase two new tractors, the opportunity cost of not doing so would be the potential revenue and profitability lost by not being able to take on another project.

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6
Q

Law of Demand

A

higher the price of good/services, less people will demand- vice versa

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7
Q

Law of Supply

A

as price of good/services increase, the quantity of the good/services being supplied will increase

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8
Q

CPI

A

Consumer Price Index: Stats Ca responsible for pricing a standardized basket of good/services (not all equal) and measure if the cost of entire basket is going up (inflation) or down (deflation)

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9
Q

Real vs Nominal Returns

A

Real is what your investment earned after adjusting for inflation. Nominal is investment without adjusting for inflation.
(erosion of purchasing power)

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10
Q

TVM

A

Time Value of Money: money in the present is worth more than the same amount of money in the future. PV and FV.

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11
Q

Simple Interest

A

Based on the principle amount of a loan
Ex. 5% interest on $100 = $5 in interest charges.

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12
Q

Compound Interest

A

Based on the principle + interest it accumulates
Ex. CC interest of 18%/annum (1.5%/month). If have $100 outstanding and don’t pay your monthly bill, then next month you owe 1.5% x $101.50

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13
Q

Secured Loan

A

Back your debt with some sort of collateral
Ex. HELOC

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14
Q

Unsecured Loan

A

No collateral. Higher interest rate/fees because the risk is higher for the bank

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15
Q

HELOC

A

Home Equity Line of Credit: pledge house as collateral, if you can’t pay bank can force you to sell your house

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16
Q

APR

A

Annual Percentage Rate: all extra fees with interest.

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17
Q

Mortgage

A

A loan secured with real estate or personal property. The minimal down payment is determined what the purchase price of the house is

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18
Q

Closed Mortgage

A

Cannot be prepaid, renegotiated, or refinanced before maturity, unless in contract.

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19
Q

Open Mortgage

A

Prepaid at anytime, without requiring payment of additional fees

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20
Q

FR Mortgage

A

Fixed-Rate: the interest is fixed for a specific period of time

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21
Q

VR Mortgage

A

The interest rate changes usually with the prime rate. “floating” or sometimes referred to adjustable rate (ARM)

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22
Q

Stress Test

A

Calculate your ability to pay for mortgage using whatever is greater, 5.25% or current rate + 2%. Can you handle if interest rates go up?

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23
Q

CMHC

A

Canadian Mortgage and Housing Corporation: if you want to buy house and cannot afford to put minimum 20% down payment. Insurance helps stabilize market and ensures availability of mortgage funding

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24
Q

Term

A

Current mortgage agreement. After the term is expired, the balance of the principle owing on the mortgage can be repaid or a new mortgage agreement be be entered based on current interest rates.

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25
Q

Posted Rates vs Best Rates

A

What banks are advertising to the public. Often there is a better rate that is lower which you can access via mortgage broker negotiation

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26
Q

Central Banks

A

All country has 1 central bank= Bank of Canada. Manage the currency, money supply and interest rates for each country and oversee commercial banking system.

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27
Q

Global Financial System

A

Framework of agreements and institutions that facilitiate the flow of capital for investing and trading. Central banks

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28
Q

Commercial Banks

A

Provide services to public through deposits, loans, investments products and operate as business for profit. CA has 5 (CIBC, TD, BMO, Scotia, RBC)

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29
Q

Retail Banking

A

Personal banking (car loans, mortgages)
Wealth management

30
Q

Commercial Banking

A

3 tiers: small business banking
med-big commerical
commercial national/ corporate

31
Q

2 Types of Personal Banking

A

Revolving: LOCs
Reducing: mortgages= shorter term (equipment loans), longer term (houses)

32
Q

EBITDA

A

Earnings Before Interest, Taxes, Depreciation and Amortization

33
Q

3 Thing for Credit Worthiness

A
  1. Character
  2. Capacity
  3. Collateral
34
Q

Quantitative Easing

A
  1. Central bank creates money 2. buys bonds from commercial banks 3. money lent to consumers/corporations, reduces interest rates 4. decrease in prices so people can borrow more money 5. people spend more money 6. stimulates economy
35
Q

Interest Rate

A

on a day to day basis. Central banks control money supply by adjusting rates. BOC has target for 2%, because this is ideal for stable stimulated economy that consumers are comfortable with.

36
Q

Deflation

A

Dropping off the CPI to below 0%. which is worse case scenario. Means economy is shrinking from lack of money supply or oversupply of goods = dropping of prices. Severe recession

37
Q

Overnight Rate

A

the interest rate commercial banks borrow and lend one-day funds to each other. Can also deposit with BOC.
BOC sets rate for overnight = policy interest rate

38
Q

Prime Rate

A

Each bank sets own prime lending rate, the 5 big commercial banks have around same rate. This is for loans, mortgages, LOCs etc.
Prime + X% = total interest rate

39
Q

Fiscal Policy

A

What gov does when it changes tax rates and levels of gov spending to influence the overall demand of the economy.
EX. COVID
-tax deadlines pushed back
-additional assistance to families with children
-Emergency Care Benefit- income for people who had to stay home
-Emergency Support Benefit through CRA
-Changes to Student Loans
-Canada Emergency Wage Subsidy

40
Q

Statue Law

A

Legislation, acts, codes, enactments of municipalities, bylaws passed in parliament and levels of gov.

41
Q

Common Law

A

Precedent setting law “made by judges”

42
Q

Severence

A

-individual statue (what is in bylaws etc): 1-3 yrs = 2 wks
-common law (what would be determined by judge): compensation or damages

43
Q

Termination with and without just cause

A

Generally, employer can fire employee just for cause (theft) and not own any termination pay at common law

44
Q

Criminal Law

A

relationship between state and the individual

45
Q

Summary Conviction

A

Quick and simple manner: misdemeanour, person not usually arrested but ordered to appear in court. max fine $2000 and/or 6mos in jail

46
Q

Indictable Conviction

A

Entitled to trial by jury: Murder, manslaughter, sex assault, break and entry

47
Q

Civil Law

A

relationship between 2 individuals

48
Q

Hierarchy of Courts

A
  1. Supreme Court
  2. Court of Appeal
  3. Kings bench
  4. Provincial court
  5. Justice of Peace
  6. Administrative Tribunals
49
Q

Tort

A

Wrong doings: when a person or corp. causes wrong doing or injury to another individual.

50
Q

2 Types of Intentional Tort

A
  1. Personal: assult, battery, false imporisonment
  2. Economic: defamation, slander, libel, interference with land for chattel
51
Q

Unintentional Tort

A

Negligence, did not intend to cause harm

52
Q

Example of Intentional Tort

A

Strict Liability: 1868 Ryland (plaintiff) vs. Fletcher (defendant)
-any person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape”. If the owner of a zoo keeps lions and tigers, he is liable if the big cats escape and cause damage or injury.

53
Q

Example of Unintentional Tort

A

Negligence: Donohue vs. Stephenson
-Stephenson manufacturer of ginger beer, sells to retailer, retailer sells to purchaser, purchaser gave friend beer who became ill b/c there was snail in it. Friend has no contract with retail or manufacturer… Love thy neighbour

54
Q

Love Thy Neighbour

A

Anyone reasonably affected by your actions is owed a Duty of Care (purchaser or friend). if manner is activity is below standard, there is negligence.

55
Q

Vets and Love Thy Neighbour

A

Occupier has duty of care those coming onto their land.

56
Q

Occupier’s Liability

A

Owed a standard duty of care
Trespasser: uninvited, however, attractive nuisance- duty of care appliers to trespasser who is enticed to trespass.
Licensee: occupier must warn of potential risks
Invitee: enticed to come, highest standard of care, must warn of all dangers and anticipate other dangers within reason.

57
Q

Vicarious Liability

A

Extension of negligence beyond the person who was negligent.
Ex. Employer negligent for acts of the employee.

58
Q

Business

A

Any type of affairs with an objective to make a profit

59
Q

Sole Proprietorship

A

-Simplest form of a business
-one person owns entirely
-income tax as individual
-name may or not be registered

60
Q

Partnerships

A

-two or more person who jointly carry on a common business with the same objective being to share profits/losses
-liable for wrongdoings of other partner

61
Q

Corporation

A

-separate legal entity “person”
-passed and possessed by people but never dies
-created under provincial statue or Federal Corp Act
-limited liability, members not personally responsible for debts. Vets cannot incorporate to avoid liability
-Tax avoidance, rates lower than personal rates

62
Q

Holding Company

A

Used by incorporated companies for holding investments, used for tax deferral and reduce tax rates.

63
Q

Agency

A

-Contract between principle and agent
-contract between agent and third party
-ultimately arrangement between principle and third party

64
Q

Nonprofit

A

Membership NFP: mutual benefit
Charitable NFP: Public benefit

65
Q

Business Trusts

A

-Property ownership has 3 attributes:
-Settler (individual) gets up trust and contributes for beneficiaries
-Trustee appointed by settler to manage and control assets
-Beneficiary has right to benefit from the property

66
Q

Contracts in Vet Med

A

-Employee contracts
-Purchase agreements
-Partnership agreements
-Leases

67
Q

5 Elements of a contact

A

1.Capable
-invalidated if an infant <18yrs, mentally incompetent, drugs/alcohol, enemy alien
-exception if contract for necessaries
-corporation is a person
2. Mutual agreement
-definite offer and acceptance
-unconditional, otherwise your making a counter offer
-communicated- withdrawn anytime before accepted
-manner-same manner as offer
-time period- reasonable
3. Legal consideration
-must be a valuable consideration, but not necessarily money. “sealed” was historically used.
4. Genuinely intended
-voided by fraud, misrepresentation, duress, undue influence, mistake
-fraud (intentional), misrepresentation (by mistake)
5. Lawful subject matter
-crime, civil wrong, contract against public policy

68
Q

What contacts must be WRITTEN?

A

-all that cannot be completed within a year
-real property
-where another person agrees to be responsible for debt (co-signer)
-related to execution of will/estate

69
Q

Elements of completing a contract

A

-performance- done obligations
-agreement- agree to terminate
-substitution-enter new
-impossible to perform- force majeure
-operation of law- bankruptcy
-breach of contract- failure to perform

70
Q

Non-Compete Clause

A

Contractual terms designated to protect a business from competition by a former employee that could harm the business
-CA courts will not enforce that unnecessarily restrict employee’s freedom to earn a livelihood after end of employment.
-should only prohibit employee from engaging in same or similar activities the employee performed. Geographic scope no broader than areas which employer is vulnerable
-cannot contain no time limit- usually 12 most or less.

71
Q

Non-Solicitation Clause

A

Prohibits a former employee form soliciting the customers or employee’s of his or her former employer.
-CA courts find this as adequate protection to business and may refuse non-compete clause.

Vet Year 1 (4 decks)

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