Business Productivity and Financial Management Concepts

Flashcards covering key terms and definitions related to business productivity and financial management concepts.

Business productivity

The measure of how much a business produces relative to the resources, including labour and capital, used to produce goods and services.

Economic productivity

A measure of productivity that uses dollar values as the measure of output.

Efficiency

A synonym for productivity; a ratio that measures how much gets achieved relative to the inputs used.

Experience curve/Learning curve

The phenomenon where the more often a person performs a task, the more adept they become at it.

Labour productivity

A measure of productivity of a country’s labour force dividing GDP by total hours worked.

Physical productivity

A measure of productivity that uses numerical quantity as the measure of output.

Planned obsolescence

A deliberate policy to create products with limited useful life to ensure they become obsolete.

Quality

Meeting or surpassing customer expectations.

Total Quality Management (TQM)

Involves everyone in the business to ensure products meet expectations with no tolerable defects.

Accounting

The system for collecting, analyzing, and communicating financial information.

Audit

A formal examination of an organization’s financial procedures and statements.

Financial accounting

The presentation of financial information concerning the performance and financial condition of the business.

Fiscal year

A business's operating year for financial accounting purposes.

Generally Accepted Accounting Principles (GAAP)

The rules and methods that an organization’s accounting system must adhere to.

Information system

Any system that allows people to record, store, and transmit data to create usable information.

Knowledge

The accumulation of understanding and experience to use information for decisions.

Management information systems (MIS)

Any system for collecting data that produces useful information for managers.

Accounting Equation

The fundamental equation: Assets = Owner’s Equity + Liabilities.

Depreciation

The gradual decline in an asset’s value due to age, use, or obsolescence.

Gross Profit

Revenue minus the cost of sales; the profit from selling products.

Net profit

The result after all costs and expenses, including tax, are deducted from revenues.

Working capital

The difference between an organization’s current assets and current liabilities.

Budget surplus

When an organization’s inflows exceed the cost of its plans and projects.

Chief Financial Officer (CFO)

The senior manager responsible for overseeing the financial management of the organization.

Human Resource Management (HRM)

Activities involved with planning, organizing, leading, and controlling a business’s people.

Motivation

The internal process that gives an individual energy and desire to act or behave in a specific way.

Maslow’s Hierarchy of needs

A theory that categorizes human needs in a hierarchy, from basic needs to self-actualization.