Updated DECA Terms ETDM Exam

Operational Budget

Financial tool that entrepreneurs use to plan, monitor, and manage their venture’s income and expenses

Short term loans

Loans that are to be repaid in a year or less. Can be used to purchase seasonal items for resale

Accounts receivable

Money owed to a business by it’s debtors

Horizontal Analysis

Financial analysis technique used to calculate a business’s performance over time; compares the same items on a company’s financial statement for two or more periods.

Vertical analysis

Comparison of financial statements by representing each line item on the statement as a percentage of another line item; often used to show relationship of each component to the total in a financial statement.

Fundamental analysis

Tool used by stock analysts to determine if a company’s stock is overvalued or undervalued, studying all aspects of the company to determine its worth

Market segmentation

Includes behavioral and demographic segmentation, meets needs of specific groups of customer

Behavioral segmentation

Process that divides customers into segments based on their behaviors as they interact with a business.

Demographic segmentation

General segmentation based on age, sex, etc.

Marketing information management (MIM)

System that organizes and evaluates marketing operations, businesses use it to keep track of marketing trends and activities, helps marketers make decisions about what and to whom to sell

Workflows

Processes from which a piece of work passes from initiation to completion

Production processes

A method of using economic input like labor/land to produce goods and services to cutomers.

Corporate governance

A set of rules that are used to direct or manage a company, benefits include increased access to capital, better strategic planning, attracts talented directors, and encourages transparency.

Shallow Depth

The depth of a product mix when there are fewer products available in each category, minimizes cost because there is not as much inventory to manage.

Open corporations

Can be owned by thousands of stockholders

Pass-through entity

Profits and losses are claimed on owners' personal tax returns.

Benefits of a corporation

Limited liability, indefinite length of life, ease of expansion, legal entity, and transfer of ownership.

Global industry benchmarking system

Shows standards to evaluate internal channel members in the international supply chain

Mixed economy

Individuals and businesses are primary decision makers while government regulates the system as a whole

Incorporation fees

Cost a company has to pay before it becomes an active business.

Trade association fees

A trade association is an organization of companies who have shared interests, and it usually has a membership fee

Stockholders equity

Amount that owners of a company invested back into their company

Contributed Capital

Cash and other assets that shareholders have given a company in exchange for stock in the company

Managerial accounting

Accounting that a business uses when making big decisions or establishing a budget

Financial accounting

Recording, summarizing, and reporting business transactions

Accrual accounting

An accounting method where revenue or expenses are recorded when a transaction occurs vs. when payment is received or made.

Libel

Making false statments that harm someone’s reputation

Cause termination

A termination for this occurs when an employee's conduct seriously violates company policies or jeopardizes the company or other employees

Misrepresentation

Making unrealistic statements about a product

Negligence

If a business fails to protect workers from risks or health hazards

Incompetence

If a business does not have the skills to get the job done

Legality of purpose

Requirement of an enforceable contract that means the agreement has to be legal

Capacity

Having the mental ability to make and understand consequences of decisions, both parties have to be sane, sober, and of legal age

Express contract

Both parties have verbally expressed or agreed to what they will do.

Tort

A wrongful action that is taken against a business with the intention to cause it harm.

Executed contract

Exists only after both parties have met their obligations.

Channel intermediaries

Perform channel functions in an indirect channel of distribution, responsible for marketing functions such as buying, selling, pricing, promotion, marketing, storing, packaging, and financing.

Intensive distribution

Selling the product wherever possible so customers always see it

Exclusive distribution

Where a company grants exclusive rights for distribution to another company, sold through another outlet.

Selective distribution

Selling a product in very few areas and at specific outlets

Regulatory issues

Have to do with government compliances

Private equity

Operates with investors, uses funds to invest in private companies or buy out public companies, no personal savings harmed

Delphi-sales forcasting

Very expensive, takes lots of time

Jury of executive opinion

Can be optimistic or conservative depending on the executive’s opinions. Some forecasters consider this guesswork and require other forms of forecasting to prove it

Commision

Percentage of the total sale amount that is paid to the individual who makes the sale, operating expense that is included in an income statement.

Exchange price

The amount of money that the buyer is willing to pay and the seller is willing to accept for a good or service.

Sales, wages, and commision

Operating expenses in an income statement

Purchases and value of inventory

Cost of merchandise sold in an income statement

Allowances and deductions

Revenue category of an income statement

Objectives

Goals that the business wants the marketing plan to achieve, part of the marketing plan that the business develops first, intended to lead to increased sales and revenue

Company budget

Based on sales

Process bottleneck

Work stage that gets more requests that it can process at it’s maximum capacity, causes delays at production and interruption to workflow.

Accounting fraud

hanging a company’s financial statements to hide profits or losses or to manipulate a company’s current health. Has led to greater emphasis on government structures in recent years

Promotion

Various types of activities to persuade, remind, inform customers, persuasion is one of the main functions

Grassroots marketing

Inviting a few customers to spread the word and post favorable reviews

Push money

Incentive programs to motivate independent sales consultants, can include cash bonuses, prizes, gift cards, or vacations.

Risk inventory

Listing of an organization’s entire critical enterprise wide risks

Risk assesment

Tool used in risk management

Enterprise risk management

Allows a company to plan, organize, and lead, and control risk in every level of an organization

Risk control

Tactic to minimize a perceived risk

Change management approach

Ensures that changes are implemented in the best possible way and that the changes will lead to long term benefits

Patent

Prevents individuals from making, selling, or using an invention

Industrial distributor

Sales organization that moves products through the supply chain

BATNA

A course of action if a party’s negotiations fail and nor agreement is reached

Walk-away point

Where one party is no longer going to consider other outcomes. There are many factors to consider when walking away from a venture.

Brokerage firm

Middlemen who connect buyers and sellers to complete a transaction for stock shares or bonds.

Equity financing

When companies sell shares to investors to raise capital

Business line of credit

Lets a business borrow up to a certain amount of money and will only charge interest on the borrowed amount; helpful for unexpected expensenses

Liquidity

A business's current assets, such as income or savings, that can be used to pay expenses.

Industry analysis

Market assessment tool used by businesses to understand the competition within an industry

Holding business cost

Cost associated with a business having too much inventory on hand for an extended period of time

Payroll expenses

Compensate workers for their labor

Formal business report

An official report that contains information, research, and data needed to make decisions in a business.

Touchpoint

Any place where a customer interacts with the business. Can be used as a marketing tool

Economies of Scale

Where the average costs/unit of output decrease with the increase in the scale or magnitude of the output being produced by a business, dependent on total average cost

Feasibility study

An assessment of the practicality of a proposed plan or method

Appraisal cost

The costs associated with catching defective products as quickly as possible (quality control).

Cash receipts

All the money flowing into a business, such as sales and interest… does not include sales tax because that goes to the government

Current asset

An asset that can be converted into cash fairly quickly (one year or less)

Marketing mix

A model businesses use centered around product, price, place, and promotion that is used to promote to your target market and stand out from the competition.

Operational activities

Includes all the things a company does to bring its products and services to the market constantly and consistently.

Business workflow

A repeatable process that consists of a series of tasks that usually need to be completed in a specific order.

Gap Analysis

Process of assessing a current business situation in comparison to a target situation.

Income statement

Sheet used to show the business’s revenue, expenses, and profits. Shows business’s financial picture, income minus expenses

Balance Sheet

A statement of a company’s assets, liabilities, and capital at a particular point in time, detailing the balance of income and expenditure over time as well, close relation with company’s income statement, buildings, vehicles, capital equipment listed as long term assets on this statement

Cash flow statment

How much money a business spends or receives over time, loans are included in a cash flow statement  

Enterprise risk management

Used by a company to assess weaknesses in their company, manage risks and seize opportunities related to their objectives.

Change management

An approach to managing an organizational change in a company. It includes preparing, supporting, and helping individuals, teams, and organizations in making the change.

Sales force composite

A sales forecasting technique that creates accurate forecasts for individual products, inexpensive method to use, provides lots of detail

Oligopoly markets

Markets dominated by a small number of suppliers.

Secondary dimensions of diversity

Dimensions that can change. Include characteristics such as language, religion, income, geographic location, family status, communication style, and education level.

Corporation

Has limited liability, ease of expansion, legal entity, indefinite length of life, and has easy transfer of ownership, group of people acting as a single entity

Sole proprietorship

Unlimited liability, definitive life spans, difficulty in raising capital, not separate legal entity

Partnership

Unlimited liability, definitive life spans, difficulty in raising capital, not separate legal entity

Channel of Distribution

Makes a variety of products available to customers, short channel for local, long channel for long distance

Private entreprise

Business that is managed by individuals rather than the state, certain occupations must be licensed

Business format franchise

Continuous assistance provided by franchisor, ex. Mcdonalds, more popular type of franchise

Cost driver

Factor that changes cost of an activity, amount of labor used, number of machines used, power to run the machinery, number of hours the machinery runs are examples

Liquidity

Business’ current assets that can be used to pay expenses ex. income or savings

Ratio Analysis

Comparing ratios of different companies based on their financials