MrNeuron - Business Vocabulary Flashcards
(38 cards)
Profit?
Profit is the amount of money left over after a company pays all of its bills. Revenue minus cost equals profit.
Revenue?
Revenue is the amount of money a company collects from its customers.
Cost?
Cost is the sum of all the expenses for a company.
Stakeholders?
In business, those who will be impacted by the decisions we make, they’re called stakeholders. Customers, employees, owners, investors, upper-level managers, and other fellow employees. They’re all stakeholders that always need to be considered.
Cross-functional teams?
Small, well-managed teams made up of very different people with very different skills.
Each of those functional experts brings different skills, different problem-solving techniques; each is creative in their own way, each judges success in a different way.
Procurement and materials management.
Procurement and materials management are the segments to the company that finds suppliers, purchase the materials and then make sure that this inventory is stored and used effectively.
Logistic Manager.
Logistics managers are tasked with making all sorts of decisions that balance cost, speed, and customer satisfaction.
Reverse logistics.
Reverse logistics deals with returned items, items requiring repair that need to be sent to a repair center, and reusable and recyclable packaging.
Target Market.
People that you’re capable of satisfying while still earning a profit. That way they’re happy and you’re happy.
Debt Financing.
Options for borrowing the money. Common types of debt financing include loans and bonds.
A Loan.
A loan is a transaction where a borrower gets money from a lender and agrees to repay the money in a certain amount of time. The lender could be a bank, a friend, a family member, or even a credit card company.
Secured Loan.
The Loan in which borrower pledges some asset as collateral as the loan.
Bond.
Bonds are essentially small-scale loans from investors.*
Whose responsibility is it to keep track of the money flow?
Keeping track of the money flow is the job of accounting. They’re responsible for tracking money coming in from customers, money going out to employees and suppliers, and they’re also responsible for keeping track of money flowing inside the organisation from one department to another.
Managerial Accountant.
Managerial accounting keeps track of where all the money goes. This is important to people inside the company. This helps with budgeting. It helps us keep track of departments that are using money wisely, and it also tells us where there might be waste. Managerial accounts are the ones that tell us how much it costs to make and deliver a $2,000.00 television to the consumer. So, managerial accountants help managers inside the organisation measure costs of production, marketing, and everything else that goes on inside the company.
Financial Accountant.
Financial accountants are tasked with developing reports for people outside of the organisation.Why is this important? It informs people about our company’s financial status. That’s important for anyone considering investing in the company, and for organisations that might consider lending money to us. Plus, government agencies, special interest groups, employee unions, law enforcement, and sometimes even customers are interested in knowing about the financial activities as well as the financial stability of the organisation.
Assets.
Cash, savings, retirement accounts, your home, your car, and other property. We’d total it up. Those would be your* assets.
Cash and investments, machines and furniture, buildings and land, and also vehicles. For the most part, those are tangible assets, but you’d also include intangible assets, like patents, trademarks, and copyrights.
Liabilities.
Now, for most of you, you’d also owe money. Bills, power, water, cellphone. We’d also add in credit cards, car loans, student loans, your mortgage. Those are your liabilities.
Companies have bills. They pay off loans like you and I, but they might also have to make payments on bonds they issued to investors.
Owner’s Equity.
Corporate assets minus corporate liabilities. That gives us owner’s equity. Again, just like with our net worth, sometimes companies have positive owner’s equity.
Income Statement.
In order to measure and report their annual profit, companies will develop an income statement. An income statement adds up all sales and then subtracts all sorts of costs and taxes. One important thing to remember is that an income statement is an annual statement.
Business Plan.
A business plan is a formal statement defining your business goals, the reasons you think they can be achieved, and how you’re going to achieve them.
Financial Model.
The purpose of a financial model is to set short-term targets to keep you focused, track costs, monitor cash, and to see if you have a viable business.
Burn Rate.
This is how much cash you use each month, and know your runway, or how long you have before you need to shut down.
Trade Secrets.
These are defined as confidential information that gives a business its competitive edge.
