DECA Business Finance

Case Law

Primary source of law that is based on previous court decisions

Constitutional Law

The supreme law of the land and is based upon the US constitution

Uniform Laws

These laws address issues such astrade and commerce. These laws provide legal consistency among the states that adopt them

Statutory Laws

The US Congress enacts these laws

Product trade-name franchise

An independent sales relationship between a supplier and a dealer to stock and sell a specific or exclusive line of products

Temporal Reasoning

Reasoning which involves considering the timing of a financial transaction or process.

Collection Letter

A type of persuasive message that many businesses write to customers who are delinquent in making payments on their accounts (Purpose: persuade customers to send payment or to contact the business to make some type of arrangement)

Unity of Command

An organizational principle that states that no employee should answer to more than one manager at a time

Scalar Principle

A principle that states authority should flow in a clear, unbroken line from the top to the bottom

Hedge Fund

A pooled investment fund that uses many types of aggressive investment strategies to maximize returns

Transference

A risk-response strategy that involves moving the impact of a risk to someone or something else

Data Mining

The process of searching computer databases to look for patterns of information and correlations among information (use info obtained from data mining to make business decisions)

Structured Query Language

Used for building queries and performing database administration tasks. Made up of clauses with each clause beginning with a keyword that is typically written in all caps

Profitability Ratios

Ratios that measure the business's ability to generate profit

Economizing

The process of deciding how scarce resources will be used or which goods and services will be purchased or provided so that the most satisfaction can be obtained

Controlling

The management function that monitors the work effort

Organizing

The management function of setting up the way the business's work will be done

Directing

The management function of providing guidance to workers and work projects

Rationing

Occurs when there are limited resources, goods, and services --> those who are willing and have the ability to pay are able to purchase them

Comparative Reasoning

Used to identify financial system transactions that are very similar to each other but not exactly alike

Contextual Reasoning

Used to consider each financial transaction's circumstances and how it compares to historical patterns in the system

Query

The mechanism used to obtain the desired information from the financial databases

Bylaws

The provisions of corporate policies

Hedging

The strategy focused upon reducing exposure to risk of loss resulting from fluctuations in exchange rates, commodity prices, interest rates, etc.

Hedge Fund

A special type of investment fund with fewer restrictions on the types of investments it can make (more exclusive, fewer people can invest)

Hedge

In securities, is a transaction that reduces the risk of an investment

Cost-Plus Pricing

All costs and expenses are calculated, and then the desired profit is added to arrive at a price

Credit Union

A cooperative association formed by labor unions or groups of employees for the benefit of its members

Limited Liability

The personal assets of the owners cannot be taken if the company does not meet its financial obligations

Revolving Accounts

Charge accounts where the retailer determines the credit limit and payment terms

Opportunity Costs

Trade-offs that occur when you choose one alternative over another; they are impossible to avoid

Money Markets

These markets facilitate the buying and selling of low-risk, short-selling of land and buildings

Variance

A measure of how data points differ from the mean

Exploratory Interview

A meeting in which the purpose is to gather information about a specific topic

Break Even Formula

BEP=FC/SP-VC

Corporation

Owned by the people who have purchased shares of stock in the business

Consolidation

The joining of two or more companies to form a new company

Fiduciary Responsibility

Making wise financial decisions and obtaining financial products that will help the client achieve his/her financial goals.

Fiduciary

A financial professional who has been given legal authority to make financial transactions on behalf of an individual or business

Capital Gain

The difference between the purchase price and the sales price of an asset

Gift Tax

Tax on something of value given to another person

Cross-Source Reasoning

Reasoning that is used to compare financial transactions and processes across multiple financial systems and determine inconsistencies and errors

Clustering

Involves selecting various characteristics of a market that the business wants to explore-->selects the data that meets the criteria and clusters the data into appropriate categories

Law of Demand

An economic principle that states that the quantity of a good or service that people will buy varies inversely with the price of the good or service

Trade Deficit

An unfavorable balance of trade in which a nation's imports are greater than its imports

Prosperity Phase

Expansion (Boom) phase

Recession Phase

From prosperity to recession

Depression Phase

Contraction of economy

Recovery Phase

From depression to prosperity

Human Risks

The chances of loss caused by human weakness and unpredictability

Bonding Employees

This tactic reduces human risks by providing reimbursement for employee theft

Depreciation

The reduction in value of goods or assets occurring over a period of time

Cost Analysis

Used to determine the costs associated with a variety of business functions and activities

Accrual Accounting System

Records a business's financial transactions at the time they occur, even if the money is not exchanged at the time

Manual Accounting System

System which processes financial information by hand

External Audience

Consists of businesses or individuals who are not involved in the day to day operations of the business

Bear Market

When stock prices decrease over time, it may indicate a downturn in the market

Bull Market

When stock prices increase over time

Compensation

Pay for work completed (includes commission)

Teller

A person employed to deal with customers' transactions in a bank (most basic banking job)

Transmittal Letter

A business letter whose purpose is to accompany other written material (sent along with other documents/reports)

Decision Tree

An approach in which the data received through data mining is categorized into meaningful groups based on a set of established criteria

Dividends

Income earned on stock investment

Asset Utilization Ratios

These ratios help businesses determine if they are using their assets in the most effective ways

Liquidity Ratios

Ratios used to determine a business's ability to pay its short term debts

Extension

This indicates the total cost of each quantity of products purchased by the price per unit

Gramm-Leach-Biley Act

Repeals part of the Glass-Stegall Act by allowing financial institutions to form mergers or consolidate

Securities Exchange Act of 1934

Law which requires the disclosure of certain financial information, regulates the issuance of securities, and and outlaws insider-trading practices

Sarbanes-Oxley Act

Law which regulates corporations and public accounting firm activities

Enrichment

Involves adding interest and satisfaction to a task

Job Analysis

A detailed study of a job

Enlargement

Involves adding more tasks to a worker's present job

Line of Credit

A type of Loan

Checking account

Used to manage current income and expenses

Commodities

Resources that are often used to create other goods

Macro

A customized keystroke or shortcut that commands the database program to perform certain tasks automatically

captive insurance companies

organizations that form their own insurance company; control their own premium rates and the claims process

traditional/standard insurance company

no control over premium rates or the claim process

reinsurance carriers

sell insurance to primary insurance carriers to protect the primary carriers from unexpected losses

Chartered Life Underwriter (CLU)

insurance underwriters and calculating risks seek this certification

Certified financial analyst (CFA)

financial analysts seek this certification

Chartered investment counselor (CIC)

certification of extensive knowledge of mutual funds

Certified financial planner (CFP)

certification for financial planners

controllers

direct the preparation of financial reports such as balance sheets and income statements and are often in charge of auditing and accounting an entire company

actuaries

insurance industry and are responsible for assessing risks using statistical analysis and they design policies to minimize the cost of that risk

real estate appraisers

evaluate property value

minimum

style of decision making that uses minimum input

aging accounts

method to identify customers who owe money to the business

accounts payable reports

identify vendors to whom the business owns money

asset-depreciation reports

summarize the decreased value of a business's capital assets

asset allocation

variety of securities in an individuals or businesses' investment portfolio

liquidity

measures a business's ability to pay its short term debts

cash accounting system

records transactions when the business receives or spends money; can create problems when the business receives payment in an accounting period

accrual accounting system

records transactions at the time they occur regardless of when money is exchanged

parameter query

same query with different input

query

a short string of code used to access and retrieve specific information from a database

cross stab query

query that aggregates data to transform rows of data into columns

wildcard query

query used to locate all different variations or when a person doesnt know how to spell the demand

status query

query used to determine status of the project

benchmarking

financial analysis software that provides users with info that compares company's financial erformance with other companies