BUSINESS (Vet Med as a Business) Flashcards
(36 cards)
importance of vet business
-students coming out with more loans
-life skills (lending, borrowing, and investing)
-need for more education
business
-an organization engaged in commercial, industry or professional activities
-practice of making ones’ living
-making money by producing or buying and selling products
purpose of business
-organize some sort of economic production of goods or services
commerce
-exchange of goods and services between businesses or entities
going concern
-company that has resources need to continue operating for at least 12months
-need to have finanical statements each year
goodwill (“blue sky”)
-intangible assests that arise
Ex. company’s brand name, customer relations, customer base, etc.
-can be calculated as the difference between the cost of purchase and the fair market value of all tangible assets
base goodwill on mulitples
Ex. a really good company might have a multiple of 8 and a rural practice not doing the best might have a multiple of 2
agent
-person or party that acts on behalf of another person or party
creditor
-typically a finanical instituion (bank) that lends money or extends credit to another party
debtor
-person on other side of transaction who now owes the creditor money
revenue
-total amount of money that a business recieves for selling its goods and service
income (‘bottom line’)
-net profit
-what is left after paying all expenses and taxes
assest
-a resource (tangible or intangible) owned or controlled by an entity and has future economic value
Ex. can generate income
liability
-obligation to pay for a past transaction
Ex. loan from the bank
liquidation
-process in law when a company that is closing sells all its assests and distributes each proceeds to claimants (creditors and shareholders)
assests sold (liquidation)
-first distributed to ‘secured creditors’ (bank)
-what is left over goes to unsecured creditors
secured creditors
-usually the bank
-provided a secured mortgage or loan
-can obtain interest in the property or place a lien on it (allows them to sell the property to pay the debt they are owed)
bankruptcy
-permits an honest but unfortunate person to obtain relief from their debts while treating the creditors fairly and equally
-when liabilities are greater than assests
-goal is to provide a fresh start
-“restructuring”
debts not discharged by bankruptcy
-student loans (less than 7 years after going to school)
-alimony (money during seperation or divorce) or child support
-debt arising from fraud
Adam Smith quote
-people see an opportunity to make money
-they don’t do what they do for the fun of it, they do it to make money
scarcity
-people have unlimited wants and needs but we live in a world with LIMITED resources
-must make decisions with respect to how we allocate our resources to satisfy our needs and wants
opportunity cost
-value of the most valuable choice not taken, or the cost of the foregone alternative (ex. new tractor, if don’t then you can’t do as much field work)
-consider that every resource can be put to an alternative
*cost is the value of the next highest valued alternative
*everything we do in life has an opportunity cost
“no such thing as a free lunch”
-simplest explanation of opportunity cost
-every decision we make has a cost (you are paying for it somehow)
law of supply and demand
-availability of a resource and the demand/desire for a particular good/service at a particular price (equilibrium price)
