business exam 4

Promotional mix

Advertising, personal selling, public relations,sales promotion

Integrated marketing communications

Information and persuasive effect → send consistent message to a audience

B2B promotion techniques

Trade shows, portfolios, convention

Sarbanes oxey act

Federal oversight board that policies accounting industry －certifies financial status

Managerial accounting

Measuring and reporting costs of production and organizational costs

Financial accounting

Financial information and reports for outside the organization (investors, government , stakeholders)

Accounting equation

Assets=liabilities + owners equity

Current ratio

Total current assets/ total current liabilities

Audits

Accounting procedures + financial report → examines financial health

Audits

Accounting procedures + financial report → examines financial health

Debt to equity equation

Total liabilities ／ owners equity

Financial forecasting

Determine estimated costs, revenues, expenses ( short term -under a year, long term -5+years)

Capital budgets

Expenditures for major assets (new product development, facilities, equipment)

Secured loans

Backed by collateral (security of payment)

Internal source of financing

With-in the business-no interest or fees but only inside funds

External source of financing

Loss of control but able to borrow cash

Initial public offerings

Private company sells shares to the pubic

Primary market

Long term funding (initial public offering)

Secondary market

Buying/selling securities

Investment bankers

Assists in sale/issue of new securities

Debt financing

Secured loans/debenture - must be repaid

Equity financing

Preffered/common stock -doesnt have to be repaid

Bull market

Sustained rising stock prices(+20% from a low) and shows economic growth

Bear market

Falling prices (-20% or more) and shows recession fears

Mutual funds

Investors pool money→ ETF (exchange traded funds)

Personal finance

Management of personal resources in financial needs, success, and goals

Rule of 72

Calculate the number of years it takes for principal to double (72/interest rate)

Time value of money

Compares dollars received today vs received in the future (interest = the price of money

Role of federal reserve

Buy/sell foreign currency, Supervises banks, collects data on money, process checks

Monetary policy

Central banks (aka federal reserve) manages nation's money supply and interest rates to help economic growth

Supply of money

The amount of money the federal reserves charges for loans → higher=reduces valve

Depository institutions

Basic financial services → commercial banks, loans, credit unions

Non- depository institutions

Life insurance, pension funds, finance companies

Owners equity

Net worth of a business

Factoring

Selling accounts receivable

Equity financing

The process of raising capital by selling company shares to investors or angel investors → sharing control

Insider trading

Buying or selling publicly traded bonds/stocks

Discount rate

Rate which federal reserves charges for loans - higher=reduces values

Roth IRA

A tax-advantage retirement account to grow assets (taxed during growth )

401(k)

Tax advantaged retirement savings plan (can only withdraw when retired －taxed when withdrawn)