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Misc Business Terms

Misc information

Gross Domestic Product value of goods produced inside a country's borders by both domestic and foreign companies
Federal Budget Deficit/Surplus the difference between US government revenues and expenses in a given year
FED's Tools Open Market Operations, Discount Rate, Reserve Requirement, Public Relations
FOMC Federal Open Market Committee: principle policy-making group of the Federal Reserve
Charters of Commercial Banks 1/3 charted by Federal Government(national banks), 2/3 charted by states (state banks)
Hostile Takeover an unfriendly attempt to buy or merge a company against it's will
Industry Sectors Services(82%) and Goods(18%) Producing industries
Acquisition the purchase of an entire company or part of a company by another
Leveraged Buyout individual or group borrows money to buy a company, uses assets of the company as collateral for the loan
EDGE Act Corporation a corporation chartered by the Federal Reserve to engage in international banking operations
Leading Economic Indicators used to predict econ. conditions 8-9 months in the future...avg. workweek, stock prices, money supply, credit, etc...
Privatization sale or transfer of management of government-owned businesses to private owners
Profit "the bottom line"--all revenues minus all expenses and taxes
Competition Businesses competing with each other for the consumer's dollar-usually a benefit to the consumer
Fiscal Policy Deals with the revenue and expenses of the government(taxing and spending)
Monetary Policy the Federal Reserve's use of several key tooks to sustain economic activity at an optimum level--to avoid inflation and recession
Multiplier Effect snowballing impact of a change in one economic variable on a whole series of related economic factors
Circular Flow of Money The continuous exchange of goods and services for money
Supply and Demand How much of a product is produced depends on how much is wanted and at what price-as prices go down, the consumer will buy more, and as prices go up, consumers will buy less.
Microeconomics the study of individual units within an economy: departments, companies, etc..
Macroeconomics study of a nations economy as a whole
Golden Hello a generous package of money and benefits offered to new employees upon signing
Small Business Admin. the principal government agency concerned with small US companies
Tender Offer a proposal to buy controlling interest through of purchase of stock at well above market price
Proxy Fight a battle between management and an outside group for shareholders' voting support
Poison Pill an action by management to increase the number of outstanding shares of stock by allowing shareholdesr to buy addition shares below market value This makes the takeover more expensive.
Shark Repellant a takeover deterrent which makes the takeover subject to approval by a large majority of shareholders
White Knight a friendly takeover whereby the acqurired firm remains independent and the exisiting managerial sturcture remains in place
Golden Parachute a nifty severance package of money and befefits to executives affected by a corporate reorganization
Golden Handcuffs granting stock options of other incentives to encourage employees to resist tempting offers for employment elsewhere
National Debt cumulative total of all past deficits that have not been paid off...currently around $7.5 trillion
Business Plan the heart of the small business undertaking..addresses the full range of questions regarding the new company. The financial information is the most important part of the business plan.
Business Incubators organizations that assit new firms by providing low-cost facilities to small start-up ventures
Business Cycle Prosperity, Recession, Depression, Recovery--alternating periods of economic growth and contraction
FDIC Federal Deposit Insurance Corporation:established with the passing of the Glass Steagall Act to protect the consumer and to prevent bank failures. Insures up to $100,000
Horizontal Merger a merger of companies in the same industry
Vertical Merger a merger of companies in related industries
Conglomerate Merger a merger of companies in unrelated industries
Deregulation-Monetary Control Act of 1980 Encouraged greater competition in banking industry through deregulation of financial organizations, extended Fed's control of money supply, Made all commercial banks subject to Fed regulation(created NOW accounts)
Real GDP GDP adjusted for inflation
Inflation (blank)
Economic Systems Capitalism, Socialism, Communism
Partnership a legal association of two or more people as co-owners
Questions econ. systems must address How to use limited resources, or what and how much to produce and by whom, how goods and services should be distributed
M1 Most Liquid, includes NOW-accounts(interest bearing checking accounts)
Purpose of Banking System a network of financial institutions designed to facilitate the movement of money and to assist in implementation of Federal Reserve Policy
Joint Venture two or more firms that share an investment in a foreign company
Sole Propriatorship a business owned by just one person. Most widely used for of business ownership in the united states
Pet Projects in US budgeting-pork, pork barrel attaching riders to bills that are designed maily to gain a political advantage with their constituencies
Equilibrium Price a price which satisfies both the buyer and the seller
Entrepeneur someone who starts their own business
Comparative Advantage a result of productivity of the work force
reserve requirement the % of transaction accounts which depository institutions must keep on hand or at the Federal
forms of business ownership sole proprietorship, partnership, LLC, corporation
double taxation paying corporate taxes on profits and personal taxes by shareholders on dividends, declared from earnings
board of directors elected by shareholders-responsible for governing corporate policy
planning establishing missions and goals
theory x workers are inherently lazy and will avoid work if possible
theory y people like to work, they are inclined to make work interesting and challenging
Abraham Maslow Hierarchy of needs
Fredrick W. Taylor Principles of Scientific Management
Fair Labor Standards Board Minimum wage, 40 hour workweek, and overtime
National Labor Relations Board certifies labor unions..established by the National Labor Relations Act of 1935
Job enrichment (blank)
Managment by objectives MBO: mutual goal setting, performance orientation, focus on goals and objectives
job rotation employees rotate jobs to gain all-around experience
chain of command the flow of authority from top to bottom
organizational chart visual representation of formal structure
collective bargaining formal negotiations between management and labor aimed at producing a contract
Mediation neutral 3rd party offers reccomendations and suggestions but it is voluntary and no authority to force resolutions
Featherbedding union demands that certain jobs be overpopulated--payments for work not performed
Arbitration 3rd party offers suggestions, but it is binding on both sides
Grievance Procedure a formal set of procedures for settling disputes that arise between management and the Union
Grapevine informal communications--rumors
Networking establishing contacts that can help you
Delegation assigning job duties and related authority to subordinates
Mentoring an experienced employee guides a new hire
Centralization of Authority authority and control concentrated at top, little authority dispersed to subordinates
Directing delegating, assisting, guiding
Organizing arranging, developing, establishing, restructuring
Job Sharing two people sharing a single job, each working part of a standard shift
Flextime building a work schedule around 'core hours' established by the company
Cafeteria Benefit Plan employees select from a variety of benefits to find ones that best suit their needs
Fringe Benefits expenditures by employers for various employee programs in excess of wages and salaries
Decentralization of Authority wider dispersal of authority...more subordinates with more responsibilities
Scientific Management improve efficiency in the workplace by having time and motivation studies, determining the best way to do the job, wages tied to output
Lockout refusal by management to allow union members to enter the premises
Boycott refusal to buy a certain company's product
Douglas McGregor developed theory x and theory y
Quality of Worklife QWL: a general philosophy of employee empowerment and participation
Formal Organization structured organization of people, usually in a chart
Informal Organization deals with the interactions of people in the workplace, their attitudes, concerns, and relationships.
Wagner Act legalized collective bargaining, established National Labor Relations Board
Norris-LaGuardia Act Anti-Injunction Act: limited management's use of injunctions to stop union strikes, outlawed 'yellow dog' contracts(YDC force workers to agree not to join unions)
Landrum-Griffin Act union required to make financial disclosures, outlawed 'sweetheart' contracts (deals which didn't serve membership well)
Taft-Hartley Act outlawed 'featherbedding', allowed President to obtain an 80 day injunction if a strike threatens to imperil national safety, specified unfair labor practices
Departmentalization grouping of activities into units within the organization
Strategic Planning (blank)
Human Relation Skills getting along with others, communicating effectively, leads and motivates, earns and gives respect
Human Resource Management covers everything involved in maintaining a competent, motivated, and satisfied work force
Human Resource Planning forecasting the number of employees and the skills required to meet an organization's personnel requirements for some future period.
Conceptual Skills Sees the big picture, sets tone and direction, courageous decision maker
Management Pyramid 3 levels-Supervisory, Middle, and Top. Top is higher execs and handle long range strategy
Hierarchy of Objectives starts with the individual and works up to the company
Quality Circles meetings of small groups to resolve job-related problems
Technical Skills Knowing the details of the job, often a subject matter expert
Union Shop (blank)
Labor Union a group formed primarily to influence employer's decisions about terms and conditions of employment, and to protect the employee's interests.
Accountability responsibilites for activities and results in one's assigned tour of duty
Autocratic Management Style makes decisions alone, intolerant of input from subordinates
Hawthorne Effect employees become more effective because of feeling appreciated--a result of the Hawthorne Studies
Human Relations the way people behave towards each other, especially how employers and managers interact with employees
Laissez-faire (Free Rein)-sets broad objectives, minimal supervision, decisions left to subordinates
Line Organization Establishes a clear line of authority from top to bottom--oldest form of structure
MIS Management Information Systems: The use of computer systems to enhance Management Control and decision making by converting raw data into useful information. tailored for ind. and people are the most important part
Levels of Management (blank)
Time Management being on time, arranging affairs to be the most efficient
Henry Ford invented the assembly line
Inventory Management to have sufficient quantities of raw materials and components on hand to assure efficient production
Intensive Distribution selling your product in every outlet where final customers might reasonably look for it (convenience items)
Benchmarking comparing each of your production processes to those practiced by the best in the field
Caveat Emptor buyer beware
Bill of Materials specifies components needed to manufacture each product
Assembly Line putting parts together piece by piece
Advertising Plan directing a message towards an audience
Analytical Process breaks down raw materials into entirely differnt products
Creative Selling indentify customer needs, offer solutions using skillful proposals
Conversion Process (in production) where inputs are converted to outputs
Convenience Item things that people purchase frequently as needed--intensive distribution (deoderant)
Consumer Items products that people buy, split into 3 groups (convenience, shopping, and specialty)
Common Carrier transportation companies athat perform shipping services for compensation for the general public
Distribution Channel the path that products follow from producer to consumer
Exclusive Distrobution use of very few wholesalers or retailers in a given market
Expert Selling deals w/ speciality items, salesman must have expert knowledge of the product
Fixed Position Layout product stays in one place, workers and equipment come to it
Forms of Transportation railroads, trucks, pipelines, etc..
Marketing Research identifying consumer needs and wants
Marketing Mix a combination of product, price, promotion, and distribution strategies used to market products and services
Marketing Concept Customer is King
Marketing the process of planning and executing the individual and organizational objectives
Market a group of people with the means($), authority and potention to make purchasing decisions
Penetration Pricing introducing a product at a low price
Materials Requirement Planning (blank)
Market Segmentation Dividing the total market into groups with similar characteristics
Material Distribution Strategy all activites involved with moving a product from producer to end user
Mass Production Making uniform products in great quantities
Market Share the percent of the market controlled by a company or product
Missionary Selling visits customers, has follow-up visits, creates goodwill
Mechanization use of machines to improve worker productivity and to streamline production
Physical Inventory actual physical count of items in stock
Pull Strategy promotion is from the manufacturer to the consumer, who will exert pressure on the retailer to carry the product
Push Strategy thrust of promotional effort is through wholesalers and retailers
Product Line a group of related products with use similarities
Product Life Cycle introduction, growth, maturity, decline
Price Skimming introducing a product at an artificially high price
Product Mix all of a firm's product lines
Product Strategy (blank)
FOB Shipping Point buyer pays transportation to carrier, separate from seller's charge
FOB Destination the common carrier bills the transportation to the shipper, shipper recovers by including it in the price to the buyer
Specialization diving work into the simplest components so workers can become highly skilled in a certain area
Utility the satisfaction provided by a product of service. Form, time, place, ownership
Total Product Concept includes the basic offering, as well as a set of image and service features, all of which the potential consumer may consider
Telemarketing selling by telephone
Team Selling inviting customers, assembling a team of experts to answer questions
Target Market a specific group of consumers toward whom a company directs its marketing efforts
Strategic Market Planning (SMP) (blank)
Standardization uniformity in goods or parts, making them interchangeable
Speciality Item high-priced, few outlets. Exclusive distribution (diamond rings)
Shopping Item things that people shop around for and compare prices. Limited # of outlets, selective distribution (women's suits)
Selective Distribution use a limited number of outlets in a given geographic area (shopping items)
Personal Selling person-to-person sales pitch
Promotional Strategy Push or Pull
Operations and Production Management (OPM) manage the entire range of activities involved in producing products that consumers want
Production the use of people and machinery to convert various inputs and raw materials into products
Productivity efficiency, training, downtime, benchmarking
Line of Credit an agreement with a bank to make a certain amount of credit available on an as-need basis
Laddering artificial inflation of stock prices
CFO Chief Financial Officer-carry out the financial mission of the corporation
AICPA American Institute of CPAs
Debt Financing carried out with borrowed money
Common Market maintains a custom union and seeks to have all trade rules among members in agreement
Equity Funds (blank)
Dumping selling products at a lower price abroad than in the domestic market
Factoring selling accounts receivables at a discount to a financial institution known as a factor
Public Corporation owned by stockholders
Discount Rate (blank)
Round Lot 100 stocks, or another set amount
Yield a percent, dividendsd divided by market price
Transactions (blank)
Statement of Cash Flows "where got, where gone"
Risk-Return Trade Off the higher the risk, the higher the return
Return of Equity net income/total owner's equity
Retained Earnings what's left after deductions of expenses
Financial Management needs for and souces of funds
Financial Information (blank)
Financial Control (blank)
Financial Manager's Responsibility (blank)
Owner's Equity value of the company after liabilities are deducted from assets
GAAP Generally Accepted Accounting Principles...the rules of the game
Fixed Assets property, plant, equipment...relatively permanent
Financial Plan (blank)
Financial Statements Balance sheet, income statement, statement of cash flows, statement of retained earnings
Double-Entry Bookkeeping maintaining balance using 2 entries for every transaction
CPA certified public accountant
Current Assets assets which can be converted to cash within a year
Current Ratio current assets divided by current liabilites
Assets everything you own
Internal Auditors appointed by the board of directors
Leverage (blank)
Liability what you owe
Liquidity measurement of ease of converting to cash
Auditing checking the data in the financial statements
Balance Sheet snapshot of the company's financial position at a given time
Accounting developing and providing reliable financial information
Income Statement shows income, expenses, and profit over a period of time
Market Order make the trade at the best price possible at the time the order is received
Export-Import Bank of the US gives low-interest loans to foreign buyers of American products
Exports the value of all the goods and services shipping from the US to foreign countries
Imports the value of all the goods and services shipping into the US from foreign countries
Import Quotas restricts quantity of imports
Absolute Advantage resulting from natural resources
Devaluation (of currency) the term given to a decrease in one country's currency compared to another
Exchange Rate the value of one nation's currency relative to others
Foreign Licensing contract w/ a foreign company to produce and/or distribute its products in a specific geographic area
Multination Corporation companies that have established major operations in several countries
Tariffs a tax on imports
Balance of Payments all of a company's international financial transactions for a particular time period
Balance of Trade the difference between a nation's exports and imports
World Bank provides low interest long-term loans for specific economic development projects to underdeveloped and developing countries
World Trade Association WTO: to assure equitable trade practices among member nations
Nasdaq computerized quotation system
Tracking Stock tracks the performance of a specific business unit
Stock Broker buys and sells securites for clients in the secondary market
Short Selling borrowing stocks in hope price will go down, pay back at a lower price
Securities the collective name given to stocks and bonds
Secured Bonds backed by specific pledges of company assets-first claim on assets
Secondary Market involves the purchase and sale of securites previously bought and sold
Primary Market involves the sale of new securities
Preferred Stockholders paid before common stockholders, more stable, holders have claims in case of a collapse
Open Order leave your order in until you cancel it
Margin Trading investor borrows part of cost from broker
Government Securites least risk
Earnings per share net income/common shares outstanding
DOW Jones Industrial Average 30 blue-chip corps.
Dividend profits distributed to shareholders
Debenture unsecured bonds, backed only by reputation
Convertible Bond can be converted to common stock at bondholder's option
Common Stockholders hold stock and can vote on company issues
Capital Gains (blank)
Bull Market optimistic market
Bear Market pessimistic market
Callable Bond has the option of redeeming the bond prior to maturity date
Bond Indenture details the terms and conditions of agreement between issuer and investor
Bond Rating Services Moodys, Fitch, etc..
Bondholders (blank)
Limit Order you set the price limits for that one day
Investment Banker Underwriter: sells new issues of stocks and bonds in the primary market
Insider Trading people who trade and profit from their access to non-public information
Created by: af1892gurl