Korean Flashcards

Gross Profit Margin

Percentage of revenue that exceeds the cost of goods sold, indicating how efficiently a company produces its goods (higher is better)

(Gross Profit / Revenue) x 100%

Net Profit Margin

Percentage of revenue remaining after all expenses, taxes, and interest have been deducted from total revenue (higher is better)

(Net Income / Revenue) x 100%

Return on Assets (ROA)

How effectively a company uses its assets to generate profit (higher is better)

(Net Income / Avg Total Assets) x 100%

Liquidity (Current Ratio)

Company’s ability to cover its short-term liabilities with its short term assets (higher is better)

Current Assets / Current Liabilities

Solvency (Debt to Equity Ratio)

Compared a company’s total liabilities to its shareholders’ equity, reflecting the degree to which debt is used to finance the company (lower is better)

Total Liabilities / Shareholder’s Equity

Inventory Turnocer

Measures how efficiently a company manages its inventory by comparing the cost of goods sold with average inventory

COGS / Average Inventory

Accounts Receivable Turnover

Indicates how efficiently a company collects its receivables by comparing net credit sales with average accounts receivable

Net Credit Sales / Avg Accounts Receivable

Marketing Research Steps

1) Define research problem + objectives

2) Research Design

3) Data Collection

4) Data Processing

5) Data Analysis

6) Research Report / Presentation

Consumer Decision Process

1) Recognition of Need

2) Information Search

3) Evaluation of Alternatives

4) Purchase Decision

5) Post-Purchase Evaluation

Marketing Plan

1) Define objectives

2) Conduct Market Research

3) Develop Strategy

4) Create Action Plan

5) Monitor and Adjust

Product Development

1) Idea Generation

2) Screening

3) Concept Development and Testing

4) Market Strategy + Business Analysis

5) Product Development

6) Test Marketing

7) Launch

Feedback channels throughout, faster process usually means greater success

Pricing Strategies (5)

Cost-Value - Production + Markup

Value-Based - Value to Consumer

Competitive - Based on what competitors are charging

Penetration - Low price and gradually raise

Skimming - High price and gradually lower

Digital Marketing Funnel

Discovery - Google and Ads, measure w/ unique visitors, ad clicks, and search rankings

Interest - Blogs and Landing Pages, measure W/ Page views and time on site

Appraisal - Review Pages and Competitors Websites, measure w/ Backlinks, search rankings, and 3rd party rankings

Confirmation - Case Studies and conversion focused landing pages, measure w/ repeat visitors and returning clicks

Conversion - Contact Page and checkouts, measure w/ conversions

Selling Price

Selling Costs + Profit

Markup %

(Markup / Sales Price) x 100%

Had to cover all selling costs and generate enough profit to cover other costs

Break-Even

Number of unit sales at which total revenue equals total costs, resulting in neither profit or loss

Fixed Cost / (Selling price per unit - Variable Cost Per Unit)

Denominator is Contribution Margin

Mixed Costs

Fixed and Variable Components

Ex: Utility bill with fixed base plus variable charge on usage

Step Costs

Fixed cost up until a point but will increase once a certain level of activity is reaches

Semi-Variable Costs

Elements of fixed and variable costs

Ex: Fixed monthly payment plus additional cost with usage

Time Frame

Classification of costs depends on time frame considered. Salaries can be fixed in short term but vary in long-term

Cost Allocation

Allocating indirect costs such as administrative overhead, office supplies, or support services can be challenging as these costs are not directly attributable to a specific unit of production

Economies of Scale

As production increases, variable costs per unit might decrease. Fixed costs can become variable if production scales up significantly

Revenue-Linked Costs

Costs are linked to revenue rather than production levels. For example, sales commissions are typically tied to revenue and not strictly to volume of units sold

4 Channels of Distribution

1 - Direct Distribution (Producers to End Users)

2 - Retail Distribution (Producers to Retailers to End Users)

3 - Wholesale Distribution (Producers to Wholesalers to Retails to End Users)

4 - Agents / Brokers (Producers to Agents/Brokers to End Users)