Marketing and finance 2: FINANCE (Part B) Flashcards Preview

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Flashcards in Marketing and finance 2: FINANCE (Part B) Deck (20):
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

What two things are critical for good business?

benchmarking and decision making

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