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36 Cards in this Set
- Front
- Back
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cash generation
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realization of cash from what you do, where everyone is involved
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what is the purpose of business?
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to create a customer
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return on investment
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a profit from an investment expressed as a percentage of your return
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financial measures are...
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a way of understanding your financial state, a calculation between data sets
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cash flows and time value of money are notions that have ____ as their major factor
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time
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finance and economics are the study of...
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how we represent and manage resources in the pursuit of growth
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net margin
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total revenue minus direct and indirest costs
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SG&A
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sales, general, and administrative
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net present value
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takes into account cash flows and time value of money to determine whether an investment makes sense
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innovation is...
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wide in focus, large scale adoption; something newly created that is widely adopted
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invention is...
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narrow in focus; an idea
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margins
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measures of value and efficiency
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sales forecast
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estimate of demand
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why do sensitivity analysis?
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to answer what if questions by calculating the NPV vs changes in various dimensions
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6 nuclei of business
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1. cash generation, 2. margins, 3. return on assets, 4. velocity, 5. growth, 6. customers
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inventory
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capacity to satisfy demand
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cash flow statements
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a document that tracks your in-flow and out-flow of cash
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cash flows are...
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a pattern of income and expenses that exist for a given economic situation
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key challenge: moving from a cost-based mindset
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to an investment-based mindset
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for customers, you must...
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develop an empathy so that your offering resonates
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velocity
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turn; the speed at which value is delivered
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growth
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reflection of value created over time
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profit margin
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measure of value
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spreadsheets are a...
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tool to build numeric models that give you a sense of the dynamic behavior of a situation
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gross margin
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total revenue minus direct costs
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time value of money
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a notion that states if you design the way you appropriate your investments, you will have more today than you would otherwise
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What does Drucker say profit is?
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NOT the purpose of business; it is a measure, a test of validity
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investment
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to spend or devote resources for a future advantage
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an investment-based mindset is focused on...
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FUTURE benefits and the time value of money
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cash
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true measure
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cash flow exist to...
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work with the time value of money
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sensitivity analysis
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gives you a sensitivity to key assumptions in your financial model
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cost-based mindset is focused on...
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the now
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marketing is a...
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full life cycle activity
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ramp-up costs
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costs incured up front to start a project
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return on assets
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ratio of return over assets employed (including fixed)
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