Chapter 4 Flashcards

Question

what are the difference in annual general shareholder’s meeting (AGM) between public and private companies

Answer 1

private: NOT REQUIRED public: REQUIRED

Answer 2

private: NOT REQUIRED, but sometimes done for external stakeholders public: REQUIRED

Answer 3

private: NOT REQUIRED, but often have advisory board of formal BOD public: REQUIRED

Answer 4

private: NOT REQUIRED, unless getting ready for an IPO public: REQUIRED; majority must be independen

Answer 5

private: NOT REQUIRED, but some have them public: REQUIRED, recommended they are independent

Answer 6

private: NOT REQUIRED, unless getting ready for an IPO public: REQUIRED; at least 3 independent & are financially literate

Answer 7

private: NOT REQUIRED public: RECOMMENDED, to ensure senior management is fairly compensated and retained

Answer 8

private: NOT COMMON; they manage relationships with public investor groups public: RECOMMENDED, to attract public investments

Answer 9

These are individuals responsible for designing the policies that public companies comply wit to protect investors in capital markets that purchase securities

Answer 10

(1) do not have a material relationship with the company (2) is not part of the company’s executive team (3) is not involved with the day-to-day operations of the company”.

Answer 11

1. They are financially literate 2. 3 must be independent and financially literate at a minium 3. Do not have any maternal relationship with the comany

Answer 12

They are responsible for building strong relatonships with investor groups to attract more investors tp the company

Answer 13

It a system that outlines how certain activities are directed ti achieve goals of the company. Such as rules, roles, resposbilities

Answer 14

Its a strucures that organizes the company by its department ex: Resoucr, finance, marketing

Answer 15

--> There is a leader in each function who are experienced in the specific function + has many years of experience

Answer 16

small or medium-sized companies with a simple and relatively predictable type of business.

Answer 17

1. Build a team that are experts in their respective field 2. There is easy communication within each functional area 3. There's a reduction in function duplication

Answer 18

1. Limited perspective with the risk of operating in functional silos 2. Focus on routine tasks instead of the long-term strategy

Answer 19

The company organizes itself by various products or services it offers.

Answer 20

Works well with large companies with distinct product/or services

Answer 21

1. Creates experts for the specfic product or service segment 2. Each executive has full automonomy to make decisions about product/service line 3. Clear accountability exist by product or service lie

Answer 22

1. May create compeition between products or service 2. Might be challenging to coordinate between different p/s t 3. Could be duplication and increase I costs

Answer 23

its a structure where a company organizes itself by customer segments

Answer 24

It must have distinct customer needs

Answer 25

1.Exectucives are able to make decision for customer segment in full atunomoy. 2. Clear accountability 3. Able to specialize to customer needs and expectations

Answer 26

1. Increase in comeptition for customer segments 2. Challenges in coordination 3. Cost duplications

Answer 27

Organizes itself on geographical location

Answer 28

Works well with companies in various locations

Answer 29

1. Clear accountability by geography 2. Creates a team specialized in geographical markets 3. They have a better ability to react to changes in specific geographic market

Answer 30

1. Geographic locations might not want to work with each other 2. Causes duplication and increase in costs 3. Lack of focus and control on products/customers

Answer 31

Combine two structures (product/service + customer)

Answer 32

Large companies

Answer 33

1. Improve organizational collobaration + flexibility 2. Opportunties to learn new skills 3. efficient way to use its human resources + costs

Answer 34

1. More complex in reporting 2. Additonal time to coordinate activities 4. Can create accountability issues if roles and responsibilities are not identified

Answer 35

is when each segment prepares their own financial reports

Answer 36

Difference between revnue and variable costs (how much we have left to cover fixed expenses)

Answer 37

1. Costs thata are directy related to a specific segment Costs would not incur if segment did not exist

Answer 38

Costs that are incurred to supprt all segments and are not traceble to any specific segments.

Answer 39

revenue les variable expenses = CM - tracebale fixed expenses = operating income

Answer 40

total revenue - total expenses = total cm - total traceble fixed expenses = total operaitng income minus common fixed expenses = EBIT - inrest adn tax = net income