Finance Test #1

Front 1

a company's credit history, sales volumes, product lines, accounts receivable, inventory balances, and management structure

Back 1

internal constraints

Front 2

inflationary conditions, significant competition, high interest rates, weak economic indicators, shrinking of the money supply by the gov't, and the political environment

Back 2

external constraints

Front 3

what do successful executives do?

Back 3

successful executives use financial skills to plan their decisions

Front 4

the process of calculating revenue and expenses through receipts and other facts to determine the numbers for a company or entity

Back 4

accounting

Front 5

the process of examining the numbers, determining what they mean, and identifying what the past was and future will be for a company or entity

Back 5

finance

Front 6

takes the numbers and financial projections from numerous companies or entities to explore future trends

Back 6

economics

Front 7

difference between revenue and profit

Back 7

revenues represent money coming into a sport business. Profits are what money is left over after expenses have been paid.

Front 8

any purchase made on account, which means it is paid at a later date

Back 8

credit

Front 9

the owing of money to others

Back 9

debt

Front 10

biggest expense a franchise can have

Back 10

personnel

Front 11

what is a financial road map

Back 11

a budget

Front 12

importance of financial planning

Back 12

-develop new products

-issue commercial paper

-issue more bonds

-sell existing assets

Front 13

for most managers, making the highest profit possible is a financial objective. But there is another criterion for financial success. what is it?

Back 13

keeping stockholders happy by focusing more on earnings per share than on total corporate profits

Front 14

costs that change in direction to the number of items or products that might be consumed or the number of fans in attendance

Back 14

variable costs

Front 15

costs that remain constant and are independent of the level of organizational activity

Back 15

fixed costs

Front 16

often referred to as primary data because the business itself generates the information

Back 16

internal data

Front 17

data obtained from other sources, have already been developed and published and are referred to as secondary data

Back 17

external data

Front 18

allows a business to see whether it is paying more for similar work or results

Back 18

benchmarking

Front 19

financial planning process

Back 19

-evaluate data

-forecasting

-short-term planning

-long-term planning

Front 20

planning that dictates how a business should proceed within a short time frame, usually less than two years

Back 20

short-term planning

Front 21

a future based budget based on past financial results and expected future financial results

Back 21

pro forma budget

Front 22

components of a pro forma budget

Back 22

-a sales budget

-a promotion budget

-a materials, labor, and overhead budget

-a cash budget

-a capital appreciation budget

Front 23

assets that are bought, sold, and delivered within several days

Back 23

spot markets

Front 24

assets that are bought, sold, and delivered at a later date, that could be six months or several years later

Back 24

futures markets

Front 25

the arenas in which value is transferred

Back 25

financial markets

Front 26

controlled by a combination of economic factors and government regulations

Back 26

interest rates

Front 27

markets in which businesses raise new capital by offering securities for sale

Back 27

primary markets

Front 28

exist after a security has been sold in the primary market

Back 28

secondary market

Front 29

any asset that is easy to convert to cash

Back 29

liquid asset

Front 30

assets that a company might not be able to convert to cash as quickly but still have significant value

Back 30

hard asset

Front 31

direct obligations of the US gov't that mature in 3 to 12 months

Back 31

treasury bills or T-bills

Front 32

obligations of the US gov't that mature in 1 to 5 years

Back 32

treasury notes

Front 33

represent cash deposited in commercial banks, savings and loans, and credit unions

Back 33

certificates of deposit

Front 34

a document demonstrating ownership interest in a company

Back 34

stock certificate

Front 35

a stock market in which investors are scared and prices drop approximately 20%

Back 35

bear market

Front 36

occurs when investors are optimistic and the stock market increases more that 20%

Back 36

bull market

Front 37

represent an obligation owed by a company or an institution

Back 37

bond

Front 38

occurs when a business borrows too much money and a bank or other lending institution will not loan the business any more money

Back 38

credit squeeze

Front 39

how many companies are in the stock exchange

Back 39

2,300

Front 40

the price that a seller would like to receive for the item that he or she wants to sell

Back 40

ask price or offer price

Front 41

the amount that a potential buyer wants to spend to acquire the item

Back 41

bid price

Front 42

proper disclosure

Back 42

SEC

Front 43

advantages of a sole proprietorship and a partnership

Back 43

-easy to form

-fewer gov't restrictions

-revenues taxed only once

Front 44

disadvantages of a sole proprietorship

Back 44

-unlimited personal liability

-lasts only as long as the owner lives

-limited access to capital funds

Front 45

disadvantages of a partnership

Back 45

-joint personal liability

Front 46

s corporations

Back 46

-up to 100 shareholders and can own subsidiaries

-avoid double taxation

-corporation can only issue one form of stock

Front 47

c corporations advantages

Back 47

-unlimited life

-limited liability

-easy to transfer ownership

Front 48

disadvantages of a c corp

Back 48

-complex to form

-double taxation