Business Final

Nonprofit

Organization that exists to serve a mission, not to make profit.

Factors of Production

The four inputs: Land, Labor, Capital, and Entrepreneurship.

Economic environment

Overall economy, including interest rates and unemployment.

Profit

The money left after expenses are subtracted from revenue.

FDIC

Federal Deposit Insurance Corporation; insures bank deposits up to $250,000.

Mixed market capitalism

Economic system in the U.S. that combines markets and some government intervention.

Federal Reserve

Central bank of the U.S. that controls money supply and interest rates.

Effects of Competition

Lower prices, higher quality, more innovation, and more choices for consumers.

Supply Curve

Shows the relationship between price and quantity supplied; as price increases, quantity supplied increases.

GDP

Gross Domestic Product; total dollar value of all goods and services produced in a country in one year.

Exporting

Selling goods to other countries.

Free Trade

Trade without tariffs, quotas, or restrictions.

Opportunity Cost

The value of the next-best alternative you give up when making a decision.

Comparative Advantage

Ability to produce something at a lower opportunity cost than another.

Offshoring

Moving production or jobs to another country to reduce costs.

Social Responsibility

A business’s duty to act in the best interest of society.

Foreign Corrupt Practices Act

U.S. law that prohibits bribing foreign officials for business advantage.

Stakeholders

Anyone affected by a business’s actions.

Business Plan

Written document describing a business’s goals and strategies.

Venture Capitalist

Invests large amounts of money, expects high return and ownership.

Angel Investor

Wealthy individual investing their own smaller amounts of money.

GAAP

Generally Accepted Accounting Principles; rules for financial reporting.

Liquidity Ratios

Measure a company's ability to pay short-term debts.

Profitability Ratios

Measure a company's ability to earn profit.

Leverage Ratios

Indicate how much debt versus equity a company is using.

Efficiency Ratios

Assess how well a company uses its assets.

Accounting Equation

Assets = Liabilities + Owner's Equity.

Unqualified Opinion

Auditor's statement that financial statements are correct.

Comparative Financial Analysis

Allows comparisons across companies using financial ratios.

Equity Financing

Selling ownership in the form of stock.

Debt Financing

Borrowing money through loans or bonds.

Financial Services Modernization Act

Allowed merging of banks, insurance companies, and investment firms.

Common Stockholders Rights

Voting on major issues and receiving dividends.

Mass Customization

Using technology to let customers personalize products.

Demographics

Statistical traits of a population, such as age and income.

Consumer Behavior

How people decide what to buy and why.

Primary Data

Data collected directly from surveys and interviews.

Secondary Data

Existing data such as reports and databases.

Green Marketing

Selling products based on environmental benefits.

Product Differentiation

Making a product stand out through features or quality.

Distribution Strategies

How products reach customers, such as retailers or online.

Breakeven Analysis

Point where total revenue equals total costs.

Supply Chain

Entire flow of goods from raw materials to the customer.

Management

Coordinating resources to achieve organizational goals.

SWOT Analysis

Analyzes Strengths, Weaknesses, Opportunities, and Threats.

Leadership Styles

Different approaches to leading a team, including autocratic and democratic.

Types of Planning

Strategic, Tactical, Operational, and Contingency planning.

Mission Statement

Describes the organization's purpose and values.

Theory X

Assumes employees are lazy and require supervision.

Theory Y

Assumes employees are motivated and trustworthy.

Types of Interviews

Structured, Unstructured, Behavioral, Panel, and Phone interviews.

Labor Laws

Laws like the ADA which prohibit discrimination based on disabilities.

Hardware

Physical components of a computer, like CPU and keyboard.

Software

Programs and applications that run on a computer.

Cloud Computing

Storing data and software online instead of on a personal computer.

Phishing

Fraudulent attempts to obtain sensitive information via fake emails.

Good vs. Service

Goods are tangible products; services are intangible actions performed.

Durable Goods

Products that last for three or more years.

TQM (Total Quality Management)

Company-wide effort to continuously improve quality.