BUSN 101 Midterm

business

organization that strives for profit by providing goods/services desired by customers

goods

tangible items manufactured by businesses

services

intangible offerings of businesses that can’t be held, touched, or stored

business-to-business

selling products and services between 2 businesses

business-to-consumer

selling products and services to consumer/end user

traditional purpose of business

maximize value of firm to its owners/maximize shareholder’s wealth by increasing profit

shareholder

owns a share of a company’s stock, has right to vote on major decisions made by company

stakeholder

anyone involved with or affected by organization (shareholders, customers, employees, etc.

profit

amount earned - amount spent/revenue - expenses

revenue

amount earned from selling goods and services

expenses

what it costs to operate a business

accounting

analyze bookkeeping information and make decisionsfi

finance

paying for things and deciding what things to pay for

management

organization of physical and human capital

MIS

systems used to manage information

marketing

brand, image, reputation

supply chain management

moving items to accomplish goals

cross-functional teams

groups of people who belong to different functional/expertise domains

value proposition

unique benefit company provides customers who buy their products

information systems

systems that allow users to leverage technology, information, and people to further goals

information technology

equipment and techniques used to manage and process information

data

raw, unorganized facts that can be moved and stored

information

data that’s been processed, interpreted, organized, structured, or presented meaningfully/ usefully

spreadsheet

application used to save, sort, and manage data in rows and columns; allows entry, calculation, and storage of data

database

organized collection of data stored and accessed electronically

database management system

software to enter, store, organize, select, and retrieve data from database; tracks data and allows users to query database for information they need

enterprise resource planning (ERP) system

computerized resource planning system incorporates information about suppliers and customers with internally generated data

cloud computing

delivery of computing services over Internet, allows flexible, on-demand access to resources like software and data storage

information security

processes and tools to protect sensitive information from modification, disruption, destruction, and inspection

network segmentation

architectural design of network to manage security and access

cybersecurity

protecting systems, networks, and programs from digital attacks aimed at accessing, changing, and destroying sensitive information, extorting money, and interrupting normal business practices

accounting

process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activities

financial accounting

preparing external financial reports used by outsiders to assess financial strength of firm

managerial accounting

provides financial information used by insiders/managers to make decisions about firm’s current and future operations

auditing

process of reviewing records used to prepare financial statements and issue formal auditor’s opinion on whether statements have been prepared in accordance with accepted accounting rules

tax accounting

strategizing reductions in tax obligations aligned with IRS regulations and preparing required documentation

Certified Public Accountant (CPA)

completed approved bachelor’s degree, passed CPA exam, met state requirements; only people allowed to issue auditor’s opinion on financial statements

balance sheet

summarizes firm’s financial position at specific point in time

accounting equation

assets = liabilities + owner’s equity

assets

things of value owned by firm

liabilities

what firm owes creditors; debts

owner’s equity

total amount of investment minus liabilities; net worth

income statement

summarizes firm’s revenues and expenses and shows total profit or loss over specific time period

revenues

dollar amount of firm’s sales and any other income from interest, dividends, and rent

cost of goods sold

expenses directly related to buying or producing firm’s goods and services

gross profit

revenue - cost of goods sold

other expenses

other costs like salaries, utilities, and rent

earnings per share (EPS)

ratio of net profit to number of shares of common stock outstanding; measures number of dollars earned by each share of stock

marketing

creating, communicating, and delivering value

marketing mix/4 Ps

product, price, promotion, place

product

goods, services, and ideas

price

given in exchange for product, monetary or nonmonetary; rent, fees, charges, etc.

place

getting product from creator to customer; transportation, location, supply chain management, online presence, inventory, atmospherics

promotion

informing and influencing customers to buy product; traditional advertising, sales promotion, public relations, personal selling, social media, e-commerce

market segmentation

process of separating, identifying, and evaluating layers of market to identify target market

target market

specific group of consumers firm directs marketing at; often divided into segments so marketing strategies can be directed to more specific target

finance

allocation of assets and liabilities over time under conditions of certainty and uncertainty

financial management

art and science of managing firm’s money so it can meet its goals

financial planning

preparing financial plan to project revenues, expenditures, and financing needs over given period

investment

spending money; investing funds in projects and securities providing high returns compared to risks

financing

raising money; obtaining funding for operations and investments and balancing debt and equity

commercial banks

profit-oriented financial institutions that accept deposits, make loans, invest securities, etc.

investment banking

help companies raise long-term financing; intermediary firms that buy securities from corporations and governments and resell them to public

real estate

financing and investment structures used by developers, investors, and owners to acquire, develop, and retain properties primarily in commercial sector

equity

form of financing with funds raised through sale of stock in a business

common stock

security that represents ownership interest in corporation

dividends

payments to stockholders from corporation’s profits

public company

company with shares of stocks traded in public, usually on stock exchange

private company

company without publicly traded stock

initial public offering (IPO)

company’s first sale of stock to the public

ticker symbol

unique abbreviation to identify shares of a publicly traded company

share price

price of single share of company’s stock

debt

form of business financing with borrowed funds to be repaid with interest over stated time period

bond

long-term debt obligation issued by corporations and governments

interest

fixed amount paid by borrower to lender on regular schedule

supply chain management

process of smoothing transitions on supply chain so firm can satisfy customers; developing bonds with suppliers; bringing things in, putting things together, and sending things out

operations

design, execution, and control of operations that convert resources to goods and implement business strategy

logistics

coordination across supply chain involving flow of goods, services, people, facilities, and supplies

supply chain

securing inputs, producing goods, delivering goods; includes raw materials, supplier, manufacturer, distributor, retailer, and customer

procurement

obtaining equipment/supplies for business

inputs

natural resources, raw materials, human resources, capital

inventory management

how much of each type of good firm will keep in stock; ordering, receiving, storing, and tracking inventory

just-in-time inventory management

receives goods from suppliers exactly when needed, reduces storage costs

production

creation of products by turning inputs into outputs

outputs

products and services

supply chain sustainability

management of environmental, social, and economic impacts; encouragement of good governance practices throughout life cycles of goods and services

management

guiding development, maintenance, and allocation of resources to attain organizational goals

human resource management (HR/HRM)

coordinating, managing, and allocating human capital/employees to move organization’s goals forward

entrepreneurship

understanding opening in marketplace no one else is covering and going after opportunity at right time

entrepreneur

individual or small group who go out on original path to create new business

management consulting

help organizations operate effectively through outside perspective on problem-solving, best practices, and strategy to help companies improve performance

planning

deciding what needs to be done to achieve organizational objectives; when? how? who?

strategic

creating long-range (1-5 years), broad goals for organization and determining resources needed to accomplish goals

tactical

beginning to implement strategic plan by addressing coordination issues and allocating resources to different parts of organization

contingency

plans that identify alternative courses of action for unusual/crisis situations

operational

creating specific standards, methods, policies, and procedures used in specific functional areas of organization

organizing

coordinating and allocating resources to carry out organization’s plans

leading/leadership

guiding and motivating others toward achieving organizational goals

controlling

assessing organization’s progress toward accomplishing goals; monitoring implementation of plan and correcting deviations from plan

corporate culture

set of attitudes, values, and standards that distinguish one organization from another