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Mortuary Management > SBM Exam 3 > Flashcards

SBM Exam 3 Flashcards

1
Q

A being, human, or non-human, such as a corporation, that is recognized as having rights and duties, such as the right to own property

A

Legal Entity

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2
Q

A non-registered, unincorporated business run solely by one individual proprietor with no distinction between the business and the owner. The owner of the sole proprietorship is entitled to all profits but is also responsible for the business’s debts, losses, and liabilities

A

Sole Proprietorship

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3
Q

Legal, “artificial” entities that are formed by filing specific documents with a state government

A

Corporations

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4
Q

Double taxation of earnings generated by the corporation. The corporation is taxed at the corporate rate, shareholders are taxed on dividends earned at their individual rate

A

C Corporations

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5
Q

Can have representative management, ease of raising large amounts of capital, legal entity separate and distinct from its owners as individuals

A

Corporate Advantages

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6
Q

No taxation of the S corporation itself. Earnings are passed through to the shareholders who are then taxed individually

A

S Corporations

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7
Q

Impersonal, high incorporation fees and high taxes (double income taxation). Burdensome reports and statements required by the government(s)

A

Corporate Disadvantages

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8
Q

A business structure that protects business owners from personal liability for the company’s debts

A

Limited Liability Company (LLC)

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9
Q

Advantages:
- Secrecy
- Unique Tax Advantages
- The owner doesn’t have to share profits

Disadvantages
- Limited Capital
- Difficulty in obtaining credit
- Unlimited liability from firm’s debts

A

Sole Proprietorship

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10
Q

Advantages
- Easy to form
- Can use ideas and plans of more than one person
- Obtains financial resources from more than one person

Disadvantages
- Unlimited liability for debts of the firm
- Each partner is responsible for the acts of every other partner
- An impasse may develop if the partners become incompatible

A

Partnership(s) General and Limited

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11
Q

Advantages:
- Ease of raising large amounts of capital
- Legal entity separate and distinct from its owners as individuals
- The owner’s liability for the firm’s debt is limited to their investment in it

Disadvantages:
- Impersonal
- High incorporation fees and high taxes (double income taxation)
- Burdensome reports and statements required by government(s)

A

Corporate

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12
Q

Advantages
- Simple to set up, no forms to file
- Relatively easy to maintain once started
- The owner and the firm are one and the same

Disadvantages
- Liability for debts and accidents is placed on the business and the owner as well
- The owner’s home, stocks, savings, and personal property may be lost in the event of litigation

A

Limited Liability Company (LLC)

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13
Q

The process of thoroughly investigating a business to determine its value

A

Due Diligence

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14
Q

Primary Goals of performing your due diligence

A
  1. Attempt to find any wrong doing
  2. Attempt to find: Inefficiencies, Unnoticed opportunities, Waste, and Mismanagement
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15
Q

When attempting to find any wrongdoing, which of the following should you consider?

A

All of these

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16
Q

Cashflows that have been reduced in value because they are to be received in the future

A

Discounted Cashflow Methodology

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17
Q

The amount for the asset will sell, less the costs of selling it. Usually less than the actual cost of replacement

A

Net Realizable Value

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18
Q

The cost to acquire and ready an essentially identical asset

A

Replacement Value

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19
Q

Rules of thumb that are commonly used to estimate firm value in relation to some easily observable characteristics of the business

A

Industry Heuristics

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20
Q

The act or process of competing: Rivalry: such as the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms

A

Competition

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21
Q

The method is based on the principle that a buyer will not pay more for an asset - and a sell will not accept less - than the price of a similar asset. The method can be used to value both an entire business and its individual assets

A

Replacement Value Method

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22
Q

A common method of valuation is based on the idea that the actual value of a business lies in the ability to produce revenue in the future

A

Earnings Valuation Method

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23
Q

A valuation method used to determine the appraisal value of a business, intangible asset, business ownership interest, or security by considering the market prices of comparable assets or businesses that have been sold recently or those that are still available

A

Market Value Method

24
Q

A grant by the US government to an inventor for an idea that is new, useful, and nonobvious, giving the inventor the exclusive right to make, use, or sell his or her idea

A

Patent

25
Q

Confidential information within a company that gives the company a competitive advantage

A

Trade Secret

26
Q

A distinctive word slogan or image that identifies a product or service business’ origin

A

Trademark

27
Q

An exclusive right given to the creator of a literary or artistic work to make use of that work for business purposes

A

Copyright

28
Q

This provision appears at the beginning of the business purchase agreement. It contains the legal names and contact information for the seller and buyer. Ensure you identify all parties correctly since legal complications can result otherwise

A

Party Identification

29
Q

An overview of the company and its operations in this provision. It should contain a statement attesting to the seller’s legal authority to authorize the sale, as well as other legal representations and warranties

A

Business Description

30
Q

This provision includes the purchase price, any deposits required by the seller, and the date and time of the transfer

A

Financial Terms

31
Q

It is critical to define the type of sale in this section and the assets included and excluded from the sale. This provision will also include a section on property transfers

A

Sale

32
Q

This provision details the seller’s obligations surrounding the closing, including taxes, loans, fees, benefit transfers, salaries, buyer and seller agreements, and protective clauses

A

Covenants

33
Q

The buyer and seller require a clear understanding of who is responsible for what, including the seller’s role, new employee training, and customer obligations

A

Transfers

34
Q

This section of the business purchase agreement is typically straightforward as it addresses logistics, the closing date, and time

A

Closing

35
Q

This clause provides both the buyer and seller a procedure and means to address any sort of dispute that may transpire as a result of the transaction

A

Dispute Resolution

36
Q

Advantages:
- The customer base is already established
- Business Practices are already in place
- Often requires less cash outlay than starting from scratch

Disadvantages:
- Matching an existing business to your skillset is challenging and time consuming
- Difficult to determine what an existing business is worth
- Existing managers and employees may be resistant to change
- The reputation of the business may be a hindrance to future success
- Sellers are reluctant to disclose any problems the business may have
- Facilities and/or equipment may be in need of major repair

A

Buying an Existing Business

37
Q

The difference between the original cost of the asset less the value of depreciation to date

A

Book Value

38
Q

The business term for a group of potential customers possessing purchasing power and unsatisfied needs

A

Market

39
Q

Research, a study used by a business to determine where potential customers are located

A

Market Survey

40
Q

To detail the major characteristics of a firm - its products or service, its industry, its market, its manner of operating (production, marketing, management), and its financial outcomes with an emphasis on the firm’s present and future

A

Business Plan Purpose

41
Q

Assesses the customer segment(s) that the company serves. In this section, the company must convey the needs of its target customers. It must then show how its products and services satisfy these needs to an extent that the customer will pay for them

A

Marketing (Customer) Analysis

42
Q

Details the processes that must be performed to serve customers every day (short term processes) and the overall business milestones that the company must attain to be successful (long-term processes)

A

Operations Plan

43
Q

Describes the components and supports of the company
Legal and Organizational Structure
Key Personnel
Full / Part time, family, seasonal, etc.

A

Company Description

44
Q

A one-to-two page (250-500 words) overview of the business, its business model, market, expectations, and immediate goals

A

Executive Summary

45
Q

Details the processes that must be performed to serve customers every day (short-term processes) and the overall business milestones that the company must attain to be successful (long-term processes)

A

Operations Plan

46
Q

Describes the landscape in which a company is/will be operating. It serves to prove to the reader that there is a genuine need in the market for the company’s products and services, that the market is large enough to support substantial sales by the company, and that the industry parameters support the company’s strategy

A

Development Plan

47
Q

Research and developmental. Over the long term, even with a clear competitive advantage, a sound strategy, and a good sales plan your competitors are not likely to give up their portion of the market to you

A

Growth Plan

48
Q

Explains how the execution of the company’s vision will reap great financial rewards for the investors. As such, it is the section that investors often spend the most time scrutinizing

A

Financial Plan

49
Q

Prohibits discrimination against people with disabilities in several areas, including employment, transportation, public accommodations, communications, and access to state and local government’ programs and services

A

Americans with Disabilities Act (ADA)

50
Q

Covers public accommodations and commercial facilities (ADA)

A

Title 3

51
Q

Act of Congress to ensure safe and healthful working conditions for workers by setting and enforcing standards and by providing training, outreach, education, and assistance

A

Occupational Safety and Health Act (OSHA)

52
Q

Requirements applicable to funeral homes include those that govern wastewater discharge and the handling, storage, and disposal of chemicals, such as those included in embalming fluids

A

EPA Compliance

53
Q

The state agency authorized by state law to regulate the death are industry in the state of Texas. The authorizing statue for the agency is Texas Occupations Code, Subtitle L, Chapter 651, Cemetery and Crematory Services, Funeral Directing, and Embalming

A

Texas Funeral Service Commission

54
Q

Texas Occupations Code Chapter 651

A

Mortuary Law

55
Q

Texas Health and Safety Code Chapter 716

A

Crematory Law

Mortuary Management (8 decks)

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