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29 Cards in this Set
- Front
- Back
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free market economy |
prices set by markets (firms) |
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market |
place where people and organizations exchange products or other things of value ($); not always physical |
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financial portfolios |
consist of money from lenders & owners |
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investing portfolio consisting of assets |
cash, inventory, buildings, equipment |
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managers combine... |
$ employees and assets to operate business and create value |
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portfolio |
a mix or pool (of different resources) |
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cash |
asset= allows business to pay its bills |
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accounts receivable |
asset (customers promise to pay in future ) |
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inventory |
supply of goods |
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fixed asset |
place, equipment if owned (property,plant, & equipment)
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return |
% relating what lender or owner received from the business to what he/she puts in the business during a given period R=(p1-P0)/P0 |
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required rate of return |
aka expected return -price of money & creates creates value sought by lenders & owners |
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risk free return |
cost of $ over time assuming no risk |
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risk premium |
AS INCREASE RISK, an increase return requires by providers of money (CA gold rush= a lot of risk to go, but you could get rich) Req. rate of return=risk free rate of return+risk premium |
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graph of required rate of return |
as risk increases, risk free rate of return increases |
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what do businesses compete for? |
CUSTOMERS, assets, & $ |
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business model |
how business creates and delivers value -focuses on CVP& whats business does to meet customers needs (inputs & outputs) EX: inputs (people,assets,money)>processes>CVP>OVP |
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business strategy |
how a business tries to compete against other businesses w similar business models; competitive advantage |
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competitive advantage |
allows businesses to outperform its competitors |
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mission statement |
business model, strategy& operating values |
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business systems |
processes a business uses to operate |
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value chain |
mapping of how a business converts inputs(ppl,asset,$) >outputs that create valuator customers, owners, and other stakeholders |
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globalization |
barriers that separate ppl & global trade going down |
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information revolution |
-knowledge is more accessible to everyone |
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technology |
more ppl connect, ppl live longer, rely on technology |
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buffet on success |
happiness/rationality; power>authority |
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gates on success |
taking care of employees/vision -vision:looking towards future |
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michael |
creating shared value -P5F?? |
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risk |
uncertainty go something happing to hurt the value |
