Flashcards in Marketing and finance 2: FINANCE (Part B) Deck (20)
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1
Define accounting
a process of ID, recording, summarising and reporting economic information to decision makers in the form of financial statements
2
Define financial accounting
focuses on specific needs of decision makers external to the organisation, such as stockholders, suppliers, banks and government agencies
3
Define finance
the study of how and under what terms savings (money) are allocated b/w leaders and borrowers. Not that finance is distinct from economics in that it addresses not only how resources are allocated but also under what terms and through which channels
4
What is the accounting system?
a series of steps performed to analyse, record, quantify, accumulate, summarise, classify, report and interpret economic events and their effects on an organisation and to prepare the financial statements
5
What do managers want to know in terms of accounting?
if a new product will be profitable
6
What do owners wan to know in terms of accounting?
which employees are productive
7
What do investors want to know?
if a company is a good investment
8
What do creditors want to know?
if they should extend credit, how much to extend and for how long
9
What do government regulators want to know?
if financial statements conform to requirements
10
What are the 2 key questions of financial management and accounting?
- what is the financial picture of the organisation on a given day?
- how well did the organisation do during a given period?
11
What is a balance sheet?
financial picture on a given day that shows assets, liabilities, shareholder equity and net worth
12
What is a profit and loss account?
considers total outgoings and total income in terms of performance over a given period
13
What is a cash flow statement?
documents the cash (liquid asset) status of the company and its performance over a given period
14
What are the key performance indicators?
profit margins, sales per staff member, customer satisfaction, staff training/ CPD
15
What can yo use for benchmarking?
- key performance indicators
- costs
- processes (quality control of customer services)
16
What business decisions are faced by vets?
- new services
- old services
- new premises
- more/less staff
- different staff
- staff training/ CPD
- market development
- new equipment/ capital
17
What issues should be considerd with financial decision making?
- costs
- costs forgone
- new revenue to be gained
- short/ medium and long-term outcomes
- market requirements
- true boundaries of possibility
18
T/F: there are many differences b/w accounting and finances
True
19
What are the 3 major financial statements?
- balance sheet
- profit and loss statement
- cash flow statement
20
