Coggin BBA Exit Exam

Liquidity

Ability to pay short-term obligations

Current ratio

Current Assets ÷ Current Liabilities

Operating cycle

time needed to purchase inventory, sell it, and collect the cash

Balance sheet

Assets, Liabilities, stockholders’ equity

Income statement

revenues, expenses, and net income

Retained earnings

Accumulated profits kept in the business

Dividends reduce

retained earnings

Accounts receivable

Money customers owe the company

Accounts payable

Money the company owes suppliers

Leverage

Use of debt to finance assets

Asset turnover

how efficiently assets generate sales

If a company pays a dividend, what decreases?

Retained earnings

Communication process

Sender → Message → Channel → Receiver → Feedback

Feedback

tells the sender whether the message was understood

Nonverbal communication

body language, facial expressions, gestures, tone

Cross-cultural communication

communication between people from different cultures

Vertical communication

communication up/down the organizational hierarchy

Horizontal communication

communication between people at similar organizational levels

Conflict of interest

personal interests conflict with organizational responsibilities

Ethical climate

the organization’s overall approach/attitude toward ethics

Code of conduct

formal rules about expected ethical behavior

whistleblowing

reporting unethical or illegal behavior

Discrimmination

unfair treatment based on protected characteristics

Retaliation

punishing someone for engaging in protected activity

Groupthink

group pressure causes people to stop critically evaluating alternatives

Lying by omission

intentionally withholding important information

Free Cash Flow

The cash available for interest and dividends after the company makes the investments necessary to maintain operations

Profit does not equal cash flow

A company can report a profit but still have poor cash flow

Operating income

• Related to the company’s core operations

• Debt and interest don’t determine operating income

Corporate bonds

debt issued by corporations

Municipal bonds

Debt issued by governments such as cities/states

Tax-equivalent yield

A tax-exempt municipal bond can be compared to a taxable corporate bond
Tax-equivalent yield = Municipal yield ÷ (1 - tax rate)

Find the tax rate: 8.3% corporate bond and 5.5% municipal bond are equivalent

33.73%

Cost leadership

Trying to become the low-cost producer

Differentiation

Trying to make your product/service different and valuable to customers

Focus Strategy

Targeting a specific/narrow market segment

Competitive advantage

Something that allows a company to perform better than competitors

Mission

Why the organization exists

Vision

Where the organization wants to go

Values

What the organization believes in/how it expects

TQM Total Quality Management

Focuses on continuous improvement and quality throughout the organization

TQM Total Quality Management is most helpful for

an integrated cost-leadership/differentiation strategy

GDP Gross domestic product

Value of final goods and services produced within a country

GDP components

CIGNX
Consumption, Investment, Government purchases, Net exports

Consumption

That’s specifically confirmed by the example question

Inflation

General increase in the price level

CPI

Measures changes in the prices consumers pay for a basket of goods/services

Recession

Significant decline in economic activity

Unemployment

People who are willing/able to work but don’t currently have jobs

Fiscal policy

government spending and taxation

Monetary policy

Central bank actions involving things such as interest rates and money supply

TR =

Price x Quantity

Total revenue can increase if:

Price increases
or
Quantity increases

Supply & demand

Demand goes up, price goes up
Supply up, price goes down
Supply & price are opposite
Demand is reflects the same as price

FDI Foreign Direct Investment

A company invest directly in business operations in another country

Expropriation

A government takes/confiscates foreign-owned assets

Collusion

Competitors secretly cooperate to reduce competition, often by coordinating prices or markets
Adam Smith?

MNE Multinational Enterprise

A company that operates in multiple countries
Also know:
Globalization
International trade
Antidumping
Tacit collusion
International regulation
Nationalism
Free-market systems
Cultural differences

Human resources

Recruiting
Employee retention
Staffing
Succession planning
HR planning

Strategic planning

the process of establishing major organizational objectives and developing plans to achieve them

Six Sigma

Data-driven approach to reducing defects and variation

Zero defects

Goal of preventing defects rather than simply detecting them

Pareto Diagram

Help identify the most important causes/problems
“Which problems are causing most of the trouble?”

Cause-and-effect diagram

Fishbone/shikawa diagram

SERVQUAL

RATER
Reliability
Assurance
Tangibles
Empathy
Responsiveness

Marketing mix 4 P’s

Product
Price
Place
Promotion

Perceptual map

Visual representation of how consumers perceive competing products/brands

Price elasticity

How strongly quantity demanded responds to a change in price

Product life cycle

Introduction → Growth → Maturity → Decline

Population

The entire group being studied

Sample

A smaller group taken from the population

Parameter

A numerical characteristic of a population

Statistic

A numerical characteristic calculated from a sample

Inferential statistics

Use sample data to make conclusions about a population

Type I error

Rejecting a true null hypothesis
False positive

Type II error

Failing to reject a false null hypothesis
False negative

Significance level

Usually represented by α (alpha)

Probability

Chance that an event occurs

Dividends

low retained earnings

Current ratio

Current assets ÷ current liabilities

Which account is reduced when a corporation pays a cash dividend?

retained earnings

Which of the following best describes a conflict of interest?

An employee must choose between advancing personal interests and organizational interests.

Which is the largest component of GDP?

Consumption

A government takes control of assets owned by a foreign company. This is called:

Expropriation

Which SERVQUAL dimension involves the ability to convey trust and confidence?

Assurance

A numerical characteristic describing an entire population is called a:

Parameter

A company competing by trying to become the lowest-cost producer is using:

Cost leadership

Which formula represents total revenue?

Price × Quantity

Which marketing mix element concerns distribution and making a product available to customers?

Place

Which type of error occurs when a researcher rejects a true null hypothesis?

Type I error

Balance Sheet

Describes financial condition of firm AT A POINT IN TIME

Equity

AKA Net assets | = Assets - Liabilities

Income Statement

Describes operations OVER A PERIOD OF TIME | Revenues, Expenses, Income, Gains, Losses

Statement of Equity

bridge between income statement and balance sheet | Arrangement depends on type of organization

Cash Basis Accounting

Recorded in accounting period that payment is received or given.

Accrual Basis

Recorded in accounting period which payment is earned.

Straight Line Depreciation

Equal amounts of depr. recorded in each period.

Double Declining Balance

More Depr. is recorded in early periods.

Basic Inventory Equation

Beg Inv + Purchases = Goods Available for Sale - Ending Inv = COGS

Periodic Inventory System

Transactions recorded at end of accounting period.