Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

COMM 103 B.Man > Midterm > Flashcards

Midterm Flashcards

1
Q

Statement of Comprehensive Income (income statement)

A

shows net profit/loss

Rev - COGS = GPM - Op. Expenses = EBIT - Interest Expense = EBT - tax = net profit/loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Changes in Financial Position (balance sheet)

A

shows resources available at a point in time and the financial obligations incurred as a result of purchasing these resources.
Assets = Liabilities + Owners Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Profit Formula

A

Rev - COGS = GPM - Op. Expenses = EBIT - Interest Expense = EBT - tax = net profit/loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Statement of Cash Flows

A

how much cash is generated/spent from what activities (in/out flow)
Net Income + Cash from Operating Activities (depreciation, non-cash) + Cash from Investing (out flow) + Net Cash from Financing (in) = Net Changes to Cash Position

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Competitive Advantage

A

company possesses abilities that allow it to perform better than its rivals - can be leveraged to offer lower cost or better value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Margin Management

A

managing your ROS to ensure that you have reasonable gross profit margin (usually 0.30) and net income.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Capital Challenge

A

Acquiring and using capital efficiently to drive revenue, profitability and positive cash flow is a competitive advantage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Gross Profit Margin

A

portion of rev. that is left after direct/variable costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Profitability Margin

A

portion of rev. left after all operating expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Designated Restricted Assets

A

are earmarked for specific purpose and not available to support operating needs (non-profit)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Capitalization

A

understanding the degree of capital resources that the organization requires or will consume. Look at financial capacity and capability (involves debt, shares, etc).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Cash Operating Cycle

A

How long does it take for expended dollars to return to cash reservoir

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Cost drivers

A

where most of your costs lie - figure out how to control and lower this

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Floating exchange rate

A

values are allowed to move relative to other currencies.

As demand goes up, so does value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Pegging/fixed exchange rate

A

when the value of one country’s currency remains constant against another currency.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Balance of Trade

A

relationship between imports and exports over period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Current account

A

country’s net trade in goods, plus net earnings from interest and investments and net transfer payments to and from the rest of the world.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Foreign Exchange Reserves

A

assets held by central banks/authorities of a country that are used to back the country’s liabilities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Credit Facilities

A

variety of loans that can be offered to business/country.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Sovereign Debt:

A

debt issued or guaranteed by a national government.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

IPO (initial public offering):

A

sale of stock for the first time in the public market to raise equity to fund growth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Inflation

A

a rise in level of prices for goods/services over a period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Parity

A

being equal/equivalent to the value of one currency.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Chartered Banks

A

regulated by the Canada Bank Act to bring together borrowers and lenders by accepting deposits and lending out money while protecting customers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Comparative advantage

A

ability of a country to produce goods/services at a lower cost than other countries (ex. Natural resources for Canada)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Foreign Direct Investment (FDI)

A

when company/individual from country make an investment into a business within another country in the form of ownership or interest.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

GDP (Gross Domestic Product):

A

total market value of the goods and services (outputs) a nation produces domestically over time (usually a year).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

PPP (purchasing power parity)

A

adjusted ratio between GDP/exchange rates of countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Hostile takeover

A

an attempt to take over another company whose management are unwilling to agree to the merger/takeover.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Protectionism

A

economic policies that are put in place to protect/improve the competitiveness of domestic industries by restricting the openness of a market to foreign competitors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Strategy

A

plans/decisions that will guide firm and determine long-term performance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Tactics

A

immediate actions executed to meet short-term objectives set in planning cycle. (Ex. hiring new staff, new equipment, etc)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

GAP Analysis

A

resources required/possessed/to be procured (acquired - can be people, assets, technology, companies, etc).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Mark-Up Pricing

A

the addition to the manufacturer’s price that distributors add to the price to ensure that their own costs are covered and profit margin is achieved.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Price Discounting

A

reduction in the price of the product with the intent to stimulate the sale of a product over a period of time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Price Skimming

A

the utilization of a premium price strategy to max. the margin return on the sale of each unit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Psychology Pricing

A

pricing tactics designed to respond to psychological tendencies of purchasers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Debt Leverage

A

use of debt to finance an org. Capital asset base.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Cost of Borrowing

A

total sum of money over and above amount borrowed as a result of incurring and repaying debt obligations. Ex. Interest and cost of setting up credit facility.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Bonds

A

borrowed money for a stipulated period of time where the org. pays bondholder interest during the borrowing period as well as the full amount at end of period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Secondary Offering (APO)

A

additional public offering of stock to raise new capital.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Price dilution

A

price of existing shares decline when larger number of shares now exist (APO)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Market Capitalization Value

A

current market value of org. Calculated by # of shares x current value of shares.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Mortgages

A

backed by real estate collateral and is set on a defined schedule of periodic payments for the full repayment + interest over time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Long term notes

A

borrows a stipulated amount of money for a defined period of time (greater than 1 year) with a interest rate schedule (fixed)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Private Equity Firms

A

either a direct monetary investment for sole proprietorships/partnerships or issuance of stock for corporations.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Stock

A

security representing % of ownership of assets and entitlement to proclaim on earnings when released.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Offshoring

A

transferring component to another country to reduce costs, improve efficiency or get competitive advantage.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Outsourcing

A

contracting out component to reduce costs, improve efficiency, get expertise or competitive advantage.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Role of Senior Management Team:

A

to direct and manage the execution of the tactics and strategies required to achieve its vision and objectives. Use of assets, capital, employees and managerial acumen are necessary.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Role of Financial Statements

A

show managers sales, costs, and how to maintain a GPM and profitability margin.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Operational Transactions

A

the flow of money directly related to day-to-day business dealings (revenue and expenses)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Cash Flow Positive

A

cash inflows exceed operational cash outflows. benchmark - at what point does total revenue cover expenses.
You can get CFP before BEP as it considers depreciation, investments, etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Liquidity

A

ability of a company to meet ongoing/short-term financial obligations based on the cash it has/is generating.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Capacity

A

the ability to generate revenue and grow its revenue streams based on cash reserves and borrowing power (ex. Investing in R&D, marketing)

56
Q

Efficiency

A

ability to effectively manage its operations and allocate resources (Time to turn inventory, employee productivity, using asset base, etc).

57
Q

Solvency

A

long-term stability and ability to meet ongoing debt/operational obligations as well as fund future growth.

58
Q

Velocity

A

How quickly does money spent come back to the company (COC)

59
Q

Breakeven Point

A

level of sales/volume required to cover costs.
In Units: Total Fixed Costs /( Price/unit - VC/unit)
In $: Fixed costs / (1 - VC %)
If you want to include a target profit or debt, add to fixed costs

60
Q

BEP units formula

A

Total Fixed Costs /( Price/unit - VC/unit)

61
Q

BEP in dollar formula

A

Fixed costs / (1 - VC %)

62
Q

Optimal Price POint

A

(VC + FC + Profit) / (Est. quantity to be produced/sold)

63
Q

Cash Operating Cycle

A

DIO (days inventory outstanding) + DSO (days sales outstanding) - DPO (days payable outstanding)

64
Q

Profitability Ratios

A

Return on Sales (ROS) = net income / sales revenue
Return on Assets (ROA) = net income / total assets
Return on Equity (ROE) = Net income/total equity
Earnings per share = net income / # outstanding shares
Market Capitalization: share value x # outstanding shares

65
Q

Return on Sales (ROS)

A

net income / sales revenue

66
Q

Return on Assets (ROA)

A

net income/total assets

67
Q

Return on Equity (ROE)

A

net income/total equity

68
Q

earnings per share

A

net income / # outstanding shares

69
Q

Market Capitalization

A

share value x (# outstanding shares)

70
Q

Current Ratio

A

current assets / current liabilities

71
Q

Quick Ratio

A

(cash + accounts receivable) / current liabilities

72
Q

Solvency Ratio

A

Solvency Ratio: (net income + depreciation) / total liabilities

73
Q

Working Capital

A

Working Capital = current assets / current liabilities

74
Q

Solvency and Liquidity Ratios

A

Current Ratio: current assets / current liabilities
Quick Ratio: (cash + accounts receivable) / current liabilities
Solvency Ratio: (net income + depreciation) / total liabilities
Working Capital = current assets / current liabilities

75
Q

Debt Ratios

A

Debt to Asset Ratio = total liabilities / total assets
Shows how much asset base was created by debt financing.
Long Term Debt to Equity Ratio = total liabilities / total equity

76
Q

Debt to Asset Ratio

A

total liabilities / total assets

Shows how much asset base was created by debt financing.

77
Q

Long Term Debt to Equity Ratio

A

= total liabilities / total equity

78
Q

Activity Ratios

A

Days Recievable and Inventory Turnover

79
Q

Days Recievable

A

Accounts Receivable / Avg. Days Sales (Net Annual Sales / 365 Days)

80
Q

Inventory Turnover

A
  1. Cost of Goods Sold / Average Inventory = # of turnovers

2. Days inventory turnover = 365 / inventory turnover

81
Q

Leverage analysis

A

amount of debt used to finance the asset base, high reliability = high leverage

82
Q

Trend/Comparative Analysis

A

are liquidity, solvency and efficiency are being improved by Review current results against prior and anticipated results.

83
Q

Absolute Analysis

A

look at actual dollar amount generated, available, and owed.

84
Q

Business Operation is assessed by

A

The commercial endeavours (market, portfolio, needs) it undertakes

Its employee interaction (skills/talent brought to market) model

Its organizational efficiency (activities within an org) and structure

85
Q

To create a business model they must consider what

A

Company centric side and market centric side

86
Q

Company Centric Side

A

Activities: methods taken to deliver to the market (R&D, marketing)

Resources: assets, labour, capital, managerial acumen

Partners: complementary relationships/dependencies

Cost Structure: incurred expenses from offering/delivering to the market

Variable cost (direct labor, material costs, inventory carrying cost), 
Fixed Cost (leases, mortgages) 
Semi Fixed Cost (insurance, utilities, service agreements)
Committed costs (research and development, marketing)

Products/Service Portfolio: the different items, products or services a company offers.

87
Q

Market Centric Side

A
  1. Available Customer Segments: different markets have various needs and wants based on differences in demographic factors (age, gender, income, etc)
  2. Opportunity Assessment: analysing market to determine which segments are most likely to respond to communication services and purchase the product
  3. Positioning: develop a unique, reliable, valuable brand/products in customers minds.
  4. Value Proposition Development: statement of who a product is geared towards and the benefits (not always tangible, usually perceived) of the product.
  5. Revenue Model Development: relationship between the price (and cost) you can charge, the volume you can sell, and its profitability.
88
Q

Fundamental Objectives of Business Owners

A
  1. Short Term profit
  2. Long Term Profit and growth
  3. Social and Environmental Responsibility
89
Q

Business Planning Cycle

A

You must know where you want to compete, how you will do it, what it will take and the risk/reward.

  1. Set strategic objectives and assess business model
  2. Develop business plan (what, where, when, how) - define objectives
  3. Craft intended strategy
  4. Execute plan (“how”)
  5. Company performance and profitability - adjust for market dynamics.
  6. Company Growth
90
Q

Decision Making Model

A

well directed and positioned strategy + efficient and effective tactic execution = business growth and profitability.

91
Q

Core Elements for Assessing Strategy

A

Purpose (mission and vision), markets, products & service portfolio, resources, business system configuration, responsibility & accountability

92
Q

Mission

A

reason for existence - “save money, live better”

93
Q

Vision

A

where you want to go and become (BHAG - big hairy) “leader in retail”

94
Q

Markets (core elements for assessing strategy)

A

segment you want to compete in. Assess current success and potential future success in new markets

95
Q

Product/service portfolio (core elements for assessing strategy)

A

Consumers wants and needs change over time - company must adapt) What to add, remove, R&D, etc.

96
Q

Resources (core elements for assessing strategy)

A

Allocate resources to support strategy

97
Q

Business System Configuration

A

Modify infrastructure to meet strategic requirements (Ex. add e-commerce)
Making changes to distribution, warehousing, delivery, marketing, etc.

98
Q

Responsibility & Accountability

A

Identify who is responsible for which part of the plan

Should be SMART (specific, measurable, actionable, realistic, timely)

99
Q

SMART Strategies

A

(specific, measurable, actionable, realistic, timely)

100
Q

Changes in Business Strategy

A
  1. Operational - little resistance
  2. Strategic - some resistance
  3. Cultural (correct underlying organizational structure + model by pivoting) - more resistance. Often this is done by bringing in a new CEO.
  4. Paradigm (rebrand entire company) - tremendous resistance to change both ex. And internal
101
Q

Strategic Planning Process

A
  1. Revisit Purpose
  2. Internal/external analysis
  3. Assess competative advantage/objectives
  4. Strategy Development
  5. Execute Plan
102
Q

Directional Lock in

A

financial commitment/implementing strategies. Measures riskiness (higher capital invested = greater risk upon failure)

103
Q

Internal Analysis

A

SWOT, 3 C’s, Customer Analysis

104
Q

SWOT

A

Strengths, weaknesses, opportunities, threats

105
Q

3 C’s

A

Compentencies, capabilities, capacity (of resources)

106
Q

Customer Analysis

A

shifts in customer base, attitudes, behaviors, needs, expectations

107
Q

External Analysis

A

SWOT, Pestel, Porters 5 forces

108
Q

PESTEL

A

political, environmental, social, technological, economical, legal
How do these impact the market and products?
ASSESSES CHANGES IN THE MARKET

109
Q

Porters 5 Forces

A

(helps identify changes/disruptions to industry)

Rivalry among competitors, threats of new companies, threat of substitute products, bargaining power of suppliers, bargaining power of buyers

ASSESS INDUSTRY ATTRACTIVENESS (before entering)

110
Q

Strategy Development Levels

A

Corporate level: what to accomplish/where to compete

Business level: how to accomplish corporate strategy (specific objectives)

Operating Plan: tactics to achieve business strategy - Detailed, immediate set of objectives and tactics designed to achieve corporate and business strategies.
Ex. Staffing, marketing, costs, revenue driver and sales forecasts

111
Q

Methods to assess business risk

A

Macro - PESTEL
Industry - Porters 5 forces
Competitor - SWOT
Customer - 3C’s

112
Q

Non-Profit considerations for soical economy

A

Mission Balance: solid economic base and ensure social goals are met.
Vitality: ability to maintain and grow of community/membership support base.
Collective Entrepreneurship: strategy reflects level of community involvement
Rootedness: strengthen partnerships/networks in support of mission
Operational Effectiveness: products/services are priced to ensure accessibility by target social audiences and provide for those who can not pay.

113
Q

4 Pillars of Economic Growth and Acitivty

A

Expenditures, Savings, Assets, Credit

114
Q

Factors effecting economic growth

A

Political Stability, Established Factors of Production, Manageable Levels of Debt, National Monetary Policy, Low Inflation, Sufficient Levels of Investment, Absence of Corruption, Comparative Advantage

115
Q

Types of economic systems

A

Open, closed, mixed

116
Q

Open system

A

full and open access to the principles of private ownership, entrepreneurship, and possess an absence of regulation of the government’s part – foreign trade is unrestricted

117
Q

Closed system

A

government fully controls the economic system, and law of supply and demand, private ownership, wealth creation are largely restricted or absent

118
Q

Mixed Econmic System

A

core principles of economic system, some degree of centralized economic planning and government regulation

119
Q

Competitive Models

A

Pure competition, monpolistic competition, monoplogy, oligopoly

120
Q

Pure competition

A

almost identical products in the same market with no dominant leader ex. Oil - no differentiation other than cost

121
Q

Monopolistic competition

A

larger number of firms selling similar but different products
Difference in quality, value, service, etc (restaurants)

122
Q

Oligopoly

A

fewer more mature rivals with high capital that control majority of the market.
Have greater control over price due to limited competition.

123
Q

Monopoy

A

single product/supplier (gov. Regulated, ex. electricity)

124
Q

Commoditization

A

when products that were unique in the past become similar and non-differentiated to consumers.

125
Q

Challenges in the global marketplace

A
  • Requires an in depth analysis of market factors (PESTEL, PORTER)
  • Managers must consider how global competitors will affect business
  • Higher reputational, financial and political risks
  • Cultural and societal issues
126
Q

Global Market Benefits

A

New market opportunities, cost reduction opportunity, resource base control, closeness to markets, economies of scale

127
Q

Economies of scale

A

Reduction in cost base due to greater size, standardized process or enhanced operational efficiencies.

128
Q

Market Composition principles

A

Law of supply and demand: ability of the market, independent of external influences to determine the price for which a good will be bought/sold.
Allowance for private ownership, entrepreneurship, and wealth creation
Gov. involvement in influencing economic activity/direction (open, closed, mixed)

129
Q

Trends Impacting Canadian Market

A

Geographic clustering and economic imbalance: Distinctness between regions that have conflicting economic values. If one gains one loses.

Currency Exchange Rate Impact: Strong Canadian dollar reduces price of imported goods and greater profits from exports but makes exports more expensive for others.
Weakening of our dollar favours our export manufacturing sector.

Branch Market Impact: Countries acquire canadian businesses to get access to resources, leaving Canada in danger of losing control of its base and becoming a branch market economy

Sustainability and Green Initiatives

Aging Workforce, Immigration and Multiculturalism

Long-Term competitiveness

Small Business Emphasis

Globalization and Potential

Geopolitical Instability:

Increased Threat of Cyber Attacks

130
Q

6 Fundamentals of Global Economic Stability

A
  1. Ongoing Commitment to International Trade System
  2. Market Openness (open, closed, mixed)
  3. Absence of Protectionism
  4. Adherence to the Fundamentals of Fair Trade
  5. Balanced Economic Development: Domestic economy is just as important as exports - minimizes external buying
  6. Responsible Sovereign Debt Management
131
Q

Cost Ladder

A

Design & Development → Suppliers & Inbound Logistics (materials) → Plant & Manufacturing → Outbound Logistics/Distribution → Marketing, Sales, Service → Admin = Total Costs + Profit Margin = Selling Price

132
Q

The Fundamentals of Finncial Analysis

A
  1. Revenue Model
  2. Cost Structure and Drivers
  3. Margin Requirements
  4. Cash Operating Cycle
  5. Capitalization Requirements
133
Q

Revenue Model

A

Revenue = Price/unit X Quantity Sold
Which product sales are increasing vs. decreasing? How much revenue is based on 1 product? New vs. Existing customers? Repeat sale frequency? Avg. rev/customer?

134
Q

Variable Costs

A

Variable/Direct costs: directly tied to manufacturing of product/delivery of service.
Ex. Material costs, labour, packaging, distribution, etc.
If you stopped making the product these costs would go away, typically increase with production of units.

135
Q

Fixed COsts

A

Fixed/Indirect costs: not directly tied to manufacturing of product/delivery of service but exist as a part of running the business.
Ex. Insurance, utilities, rent, administration, debt.
They are uncontrollable (can’t change lease of 500/month for 3 years)

136
Q

Committed Costs

A

FIXED COSTS committed costs within a year - often paid in advance (Marketing, R&D, etc.)

137
Q

Capitalization Requirements/Structure

A

funds from operations (retained earnings and operating profits

credit facilities (short and long term)

equity financing (private and public)

COMM 103 B.Man (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions