Business Quantification and Implementation Flashcards

These vocabulary flashcards cover business quantification, implementation strategies, financial ratio analysis, Value Chain Analysis (VCA), Human Resource management (8 Rs), Business Model Canvas (BMC) components, and essential business permits in the Philippines.

Business Implementation

The driving force behind all activities striving to accomplish one or more objectives in a business plan.

Strategic Plan

A plan that provides a clear direction to follow, ensuring the attainment of goals and providing value to customers.

Forecasting

The process of using past and present data and patterns to make predictions or estimates about future events or trends.

Internal and External Factors

Forces such as competition, macroeconomics, events, law, season, and employees that influence sales forecasts.

Markup Formula

$$\text{Markup} = \text{Cost per unit} \times \text{Desired Markup}$$

Selling Price Formula

$$\text{Selling Price} = \text{Cost Per Unit} + \text{Markup Price}$$

Projected Daily Revenue Formula

$$\text{Projected Daily Revenue} = \text{Selling Price} \times \text{Volume of Items Sold}$$

Projected Monthly Revenue Formula

$$\text{Projected Monthly Revenue} = \text{Selling Price} \times \text{Projected Items Sold Monthly}$$

Ratio Analysis

A technique that compares two (2) numbers from a company's financial statements to evaluate financial health.

Profitability Ratio

A financial metric used to assess a company's ability to generate shareholder returns by comparing net income to revenue, assets, or equity.

Return on Investment (ROI)

Also called return on equity (ROE), it is calculated using the formula: $\text{Return on Investment} = \frac{\text{Net Income}}{(\text{Average Assets} / 2)}$

Operating Income Ratio (OIR)

Shows the percentage of profit a company can generate from each peso of its investment using the formula: $\text{Operating Income Ratio} = \frac{(\text{Operating Expenses} + \text{Cost of goods sold})}{\text{Net Sales}}$

Return on Assets (ROA)

A measure of how well a company uses its assets, calculated as: $\text{Return on Assets} = \frac{\text{Operating Income}}{\text{Average Total Assets}}$

Financial Health Ratio

A financial metric that determines a company's capacity to pay its short-term and long-term obligations as they become due.

Stockholder's Ratio

A ratio showing the firm's long-term financial stability calculated as: $\text{Stockholder's Ratio} = \frac{\text{Total Equity}}{\text{Total Assets}}$

Debt Ratio

Compares a company's total debt to its assets using the formula: $\text{Debt Ratio} = \frac{\text{Total Liabilities}}{\text{Total Assets}}$

Debt-to-Equity Ratio

Shows how much of a balance sheet is financed by creditors compared to shareholders using the formula: $\text{Debt-to-Equity Ratio} = \frac{\text{Total Liabilities}}{\text{Total Shareholder's Equity}}$

Liquidity Ratio

Refers to the company's ability to pay its short-term obligations or liabilities.

Quick Ratio (Acid-Test Ratio)

Measures short-term liquidity using the formula: $\text{Quick Ratio} = \frac{\text{Quick Assets}}{\text{Current Liabilities}}$

Current Ratio

Compares current assets to current liabilities using the formula: $\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$

Value Chain Analysis (VCA)

A process of identifying primary and support activities to reduce costs or increase differentiation while transforming inputs into outputs.

Inbound Logistics

A primary activity in VCA involving raw materials handling and warehousing.

Operations

A primary activity in VCA involving machining, assembling, and testing.

Outbound Logistics

A primary activity in VCA involving warehousing and distribution of finished products.

Marketing and Sales (VCA)

A primary activity in VCA involving advertising, promotion, and pricing channel relations.

Service (VCA)

A primary activity in VCA involving installation, repair, and parts.

Firm Infrastructure

A secondary activity in VCA involving general management, accounting, finance, and strategic planning.

Human Resource Management (VCA)

A secondary activity in VCA involving recruiting, training, and development.

Technology Development

A secondary activity in VCA involving research and development and product or process improvement.

Procurement

A secondary activity in VCA involving purchasing raw materials, machines, and supplies.

People Strategy

An organization's prioritized people plan that enables business success by attracting, developing, retaining, and inspiring the workforce.

Recruiting

The process of finding and attracting potential resources with the abilities and attitudes required to fill vacant positions.

Routing

Assessing a recruit's potential to contribute to the organization in various functions and responsibilities years later.

Retaining

The practice of holding on to employees by providing just wages and supporting work-life balance.

Resonating

Ensuring employees embrace and internalize company goals to improve productivity.

Reviewing

Measuring and evaluating employee performance in relation to organizational goals and job requirements.

Rewarding

The function of compensating, giving incentives, and recognizing employees for work, loyalty, and accomplishment.

Retooling

Re-orienting employees to new directions, changing attitudes/behaviors, and adopting responsive customer service approaches.

Recycling

Allowing employees to change jobs or reinvent themselves by seeking internal or external job alternatives.

Business Model Canvas (BMC)

A single-page plan outlining financial goals, customer base, value provision, and financing specifics.

Customer Segment (BMC)

Various groups of people or organizations that an enterprise aims to reach and serve.

Customer Relationship (BMC)

Personal or automated interactions established with a customer segment to get, keep, or grow sales.

Channels (BMC)

The ways a company reaches out to specific customer groups to deliver a value proposition.

Revenue Streams (BMC)

The component where a business verifies profitability, representing the difference between cost and income.

Value Proposition (BMC)

A set of products and services that meet needs or solve problems, causing customers to choose one business over others.

BIR TIN

A Tax Identification Number issued by the Bureau of Internal Revenue required for acquiring business permits and licenses in the Philippines.

Social Security System (SSS)

An employer registration that ensures employees are covered with insurance benefits per Republic Act No. 8282.

Barangay Clearance

A document certifying that a business complies with the requirements of the specific barangay where it is situated.

DTI Registration Certificate

A certificate from the Department of Trade and Industry that protects a business name for five (5) years.

Mayor's Permit

A business permit that ensures a business is safe under city or town ordinances; must be renewed annually.

SEC Registration Certificate

A certificate required for businesses falling under the corporation or partnership categories.