Baylor BUS 1201 Exam 3(Lail)

What is a digital presence?

The way a business presents itself on the internet to all its various constituents who come across it

What comes with a strong digital presence?

Brand growth, awareness and credibility

Communication with the public

Buyer persona

fictional, ideal consumer

requires extensive research

2-20 personas

What is the initial point to set a digital experience?

Creates tailored and targeted content

Improved results: attracts and retains customers

Downside to online presence?

Brand dilution and customer confusion

lack of online attention causes negative perceptions

cannot control conversations and reactions

Content marketing

Creating and distributing valuable, relevant, and consistent content

Drive profitable consumer action

Increase sales, cost savings, improve loyalty and online profit opportunities

What is the 80-20 rule?

80% of posts should inform, educate or entertain

20% promotes the brand

Rule of thirds

1/3 promotes business, converts leads, generates profits

1/3 share ideas and stories from leaders in the industry

1/3 is personal interactions with the audience

Digital Platforms

Develop a website

Have social media platforms

Learn search engine operations

Build and email list

Invest in online advertising

What are the metrics?

Awareness: monitors the attention across media over a period of time

Engagement: interacting with the content

Conversion: measures how effective social engagement is

Customer metrics: how customers think and feel about the company or brand

Define accounting

the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions, and events which are, in part at least of financial character and interpreting the results

Benefits of Accounting

Helps evaluates a business' performance

Creates budgets and future projections

Increase the likelihood of complying with laws and regulations

Supports managing cash flow and meeting deadlines

Helps to obtain financing and bank support

Why do businesses need an accounting information system?

Tracks and organizes financial records/accounts(income, expenses, assets, and liabilities)

Managing purchases, invoices, funding(debt/equity)

Manual vs. highly complicated with multiples systems

Accounting framework

standards to measure, recognize, present, and reveal the information that appears in a business's financial statements

US= GAAP= generally accepted accounting principles

Global= IFRS or international financial reporting standards

GAAP and IFRS are similar

Balance Sheet

Detailed info with assets, liabilities, and owner-equity

Accounting equation: assets(own) = liability(owe) + owners equity(value)

Assets

improve a business' value; resources owned by the business that hold value

Categorized by being current(cash) vs. noncurrent(need to sell, flip, etc)

Deprecation

Assets lose value

Goodwill

Intangible assets

Liabilities

Debt a business owes to an external person or business, such as a loan

Owners equity

Using the accounting equation

Owners' equity = assets - liabilities

Income statement

Summary of the business' sales, expenses, gains, or losses

Net sales

Inflows from selling goods and providing services. Also called revenue

Expenses

Outflows

Cost of Goods Sold

Cost of producing a good

General and administrative expenses

Indirectly related- rent, utilities, and insurance

Net Income (Net Profit)

The difference between operating income and income taxes (also includes interest revenue from investments; stocks and bonds)

Gross margin

Difference between net sales and cost of goods sold

Operating income

Difference between gross margin and general administrative expenses

Cash Flow Statement

Offers a detailed narrative of what happened to the business' cash during a period

Cash from operating activities

Cash from investing activity

Current ratio

Current assets/current liabilities

Measures liquidity or cash flow

Does the company have the current assets to cover its short-term liabilities

Quick ratio

= (current assets - inventory)/current liabilities

"Acid test", measures liquidity

Captures assets convertible to cash

How many types financing are there?

2 major types

Debt

Obligation(loan or bond); paid back with interest

Equity

Exchanging ownership for money

Where does financing come from?

Large amounts: banks→ financial intermediary

Collateral & line of credit

Favorable terms: small business administrations

Part of the US Federal government

Market exchange, also large: corporate debt

Commercial paper(0-9 months)

Bonds(9 months-30 years)

Partners

Invests their money into the business and takes on responsibility

Belief in self/organization

Angel Investors

Finances(and other services) before others would

Venture Capital

Comes from another company

Equity Investments

Done by issuing stocks(IPO)

Highly visible

Pro of equity investments

Reduces leverage ratios (debt/equity)

No need to pay it back

Cons of equity investments

Expensive

Must be listed on the stock exchange for public trading

Dilutes ownership

Corporate finance

The role of corporate finance is to make sure that a business has the proper funding to undertake its activities

Liquidity

Measure of current assets available to meet current liabilities due in less than a year

Timing: contractual

Managing liquidity is determining which assets to hold

Cash most liquid

Stocks/bonds are liquid

Inventory is the least liquid

Forecasting

What is coming and what will be required

What's step 1 of forecasting?

Establish a baseline of what is currently happening

What will forecasting modeling determine?

how much financing a business will need(bank, bond sales, equity sold)

Identify the drivers and daggers of revenue

Drivers: launching new products or services, updating products or services, opening new locations, etc

Draggers: competition, bad reviews, economic uncertainty, loss of supply and demand

Financial Management

Proper amount at the lowest cost of business

Opportunity costs: cash spent today could be used for some other purpose(ex. investments)

How do you compare the value of the cash spent/invested today to opportunities

What's the Net Present(NPV)?

Assumption: time value of money- where a $1 in the future is not equivalent to $1 today. The dollar loses purchasing power in periods of inflation

NPV analysis equates future cash, such as revenues or expenses, to the present value of today's money

Why? To compare projects over varying time frames at present value dollars and determine the best option

NPV is also a valuable tool in comparing a project

Break-even analysis

Determining the quality of the investment

Find the quantity of sales where revenues>expenses

Qbep = quantity breakeven point

Sales lower then Qbep are "bad"

Projects that shift the Qbep left decrease the breakeven making them an attractive idea

Ethics

all areas pf a business and every employee have an ethical responsibility to conduct themselves in a respectable manner

For finance there are additional responsibilities called fiduciary duties

What's debt snowball

When debt begins to increase

Starts small but grows quickly as the snowball travels down the hill

It brings anxiety which leads to poor financial choices

Credit card debt has high interest and really dangerous

Unexpected events or poor personal financial management

Compounding interest

Money builds on top of itself

Interest earned on an investment

Risk vs reward

Figure our risk tolerance

Bull and bear markets and asset allocation

Stocks have more risk than other tools

Market rising: bull

Markets declining: bear

Diversification is selecting different stocks to balance equity risk

Net worth equation

Net worth= assets - total debt

Authority

Assigned and influences action

Power

Influences action and inspires

Types of managers

Top managers: strategy

Functional managers: business units

Supervisory or team managers: subgroups

Staff managers: subgroups

Line managers: production

Project managers: plan, execute, and complete

How to be a good manager?

Manage people and resources

Create a safe environment

Train and empower the team

Set goals and objectives

Oversee corrections

Coach and discipline

Maintain quality

Contribute to organizational goals(giver not taker)

What are the 4 C's to being an effective leader?

Confident: not being arrogant

Connected: gather info on what fulfills people and motivates them

Committed: being focused

Courageous: humility

Decision making styles

Directive: experience, quick, alone

Conceptual: encourages planning

Analytical: observation, objective

Behavioral: collaborative but deliberate

What do managers and leaders have issues with?

Micromanaging → need to empower

Poor delegation

Fear of losing control

Fear of failure

What is establishing a vision?

What a company desires to achieve long-run goals

SWOT ANALYSIS

helpful, harmful, internal, external

S(trengths): opportunities over competition, W(eaknesses): disadvantages relative to the competition, O(pportunities): favorable factors for competitive advantage, T(hreats): factors that can harm

How to build a workplace?

managers and leaders need to understand that the most valuable resource is their employees

Any weakness that employees have is the responsibility of management to help improve

Retaining workers matters

What is coaching?

Provide direction and vision

Offering instruction and resources

Discuss specific skills (honestly)

GROW model

Goal: what do you want in return?

Reality: what, when, where, who

Options: what would you do with this and this?

Will: What will you do?

What does mentoring do?

Shares knowledge

Helps achieve personal and/or professional goals

How do you find a mentor?

Reflect if the mentorship is a good fit

Identify needs

Select people to ask for mentorship

Start personal network

Prepare elevator pitch

What is economics?

Confronting limitations

Determine trade-offs

Observe how markets work

Understand how countries trade

Government involvement

What is microeconomics?

how individuals, households, and companies make decisions and how they interact with others in the markets

Small scale

What are the 5 key notions of micro?

Scarcity: having less than the quantity demanded

Opportunity costs: the value missed out on when you choose between two or more options

Trade-offs: balancing of giving up one thing to get another

Time: one of our more precious and scarce resources

The seen and unseen: understanding what is easy to see and what is not

What is macroeconomics?

studies the economy-wide impact of phenomena

Broad larger scale

Absolute and comparative advantage work the same way when countries are setting economic policy

What are the 4 key trade concepts?

Imports: what you are lacking

Exports: when have a surplus

Tariffs: being charged an extra fee - protection against imports (also quotas)

Subsidy: promotes exports into the country

What is supply shift?

changes in supply causing less product but more product

What is surplus?

excess supply

What is shortage?

excess demand

What is inelastic demand?

with large changes in prices, there will be little change in the quantity demand

What is elastic demand?

as price increases, the quantity demanded can have large changes i.e. luxury brands

What is comparative advantage?

become a specialist at a task

Comparison of opportunity costs between subjects

What is pure competition?

many buyers & sellers, no price makers or takers ex. Gas stations

What is a oligopoly?

fewer sellers = more pricing power, more barriers to entry (ex. airlines)

What is a monopoly?

single sellers are the price makers (ex. taxis pre-uber)

What is regulated monopoly?

government-granted market entry to selected seller(s), no competition, no substitutes

What does the GPD measure?

gross domestic product, measures output of goods & services; stable growth

What is monetary policy?

supply of money & interest rates, stability from buying or selling bonds

What is fiscal policy?

government spending & taxation