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VINT 211 - FINAL
Business
| Question | Answer |
|---|---|
| economy is dependant on what | supply and demand "invisible hand" |
| what is a good response rate? | >70% |
| how does soil content relate to veterinary practises? | darker soil = higher colonization = more animals/people for the vet |
| over the years of the new grad study, most choose mixed, but the end result is more____ | SA vets |
| factors associated with graduates' choice of a career path: | -type of practise -expected level of mentorship/support -family/spousal considerations |
| factors associated with choosing a MA career path | -raised in a small center -being a male -above average knowledge of ag |
| factors associated with employee retention of recent graduates | -type of practise/caseload -amount of workload -level of mentorship and support |
| factors associated with employee leaving of recent graduates | workload - on call/hrs lack of mentorship and support |
| factors associated with being a companion animal practitioner | -raised in large center -concerned with type of practice and progressiveness -concerned with workload -self-assessed to have a poor knowledge of agriculture -less concerned with number of vets/practice |
| why vets leave mixed and food animal practise | long hours and too many nights on call |
| top 3 reasons for leaving mixed and food animal practice | workload remuneration lack of support and mentorship |
| 2019 new grads toughest challenges as a new grad | -clients and communication -self-doubt and a lack of confidence -time management and work-life balance -poor mentorship -finances |
| trends in vet med | -more companion animal -corporatization -pets becoming people -feminitization -baby boomers to millennial shift -student debt -consolidation in ag |
| trends in ag | less farmers, same amount of livestock |
| quota | a body overseeing decides what being paid |
| business | activity of making one's living by producing or buying selling products like goods and services |
| commerce | generally refers to the exchange of goods, services or something or value BETWEEN BUSINESSES or entities |
| going concern | a company that has the resources needed to continue operating for at least the next year |
| goodwill / "blue sky" | intangible asset that arises from a brand name, customer relations,etc. |
| how can goodwill be calculated | the difference between cost of purchase and the fair market value of all tangible assets. |
| agent | person/party that acts on the behalf of another |
| creditor | bank that lends money or extends credit to another party |
| debtor | person who owes creditor money |
| revenue | total amount of money that a business receives for selling its goods and services |
| asset | a resource (tangible or intangible) owned or controlled by an entity and has future economic value |
| income / bottom line | net profit after expenses |
| liability | obligation to pay for a past transaction |
| liquidation | process of a company closing and selling of its assets, first cash goes to creditors (secured then unsecured) |
| lien | placed by creditors so they can sell the property to pay for debt you owe them |
| scarcity | making decisions with respect to how to allocate their resources to satisfy their needs and wants |
| opportunity cost | the value of the most valuable choice not taken, or the cost of the foregone alternative |
| comparative advantage | country's economy ability or advantage to produce a good or service at a lower price that it's trading partner |
| globalization | the integration of economies around the world, which has been faciliated by better transportation and communication |
| equilibrium price | price where demand and supply intersect |
| economy | the wealth and resources of a country/region as evidenced by the production and consumption of goods (products or physical things) and services |
| why are interest rates at an all time low? | supply and demand |
| global financial system | a framework of agreements and institutions that facilitate the flow of capital for investing and trading |
| central/reserve banks | manage the currency, money supply and interest rates |
| what happens when economy needs to be stimulates, like heading into a recession | banks increase the supply of money, drops interest rates, and more people take out loans to buy goods and services |
| if inflation is going up too fast, then | banks raise interest rates, decrease supply of money and decrease number of loabs |
| central banks are __________ of the govt | independent |
| currency | money that is in circulation (paper money and coins) |
| interest | payment by a borrower to a lender above the principal sum |
| principal | the initial size of the loan |
| bond | a contract between two parties. FIXED INCOME investments because set at a set rate |
| coupon rate | interest rate |
| CANADA central bank and governor of the bank | Bank of Canada, Tiff Macklem |
| USA central bank and board of governers | federal reserve, Jerome Powell |
| *What is the difference between monetary and fiscal policy? | MP involves controlling interest rates and influencing the supply of money, whereas fiscal policy is what gov't does when it changes tax rates and levels of gov't spending to influence overall demand in the economy |
| quantitative easing | how central banks control the supply of money. |
| printing money/quantitative easing is all about | increasing liquidity |
| inflation | rate at which the average price of a basket of goods and services increases over time. (consumer price index( |
| deflation | dropping of CPI/inflation below 0% |
| overnight rate | the interest rate that banks borrow and lend one-day funds to eachother |
| the central bank sets the target for the overnight rate called | policy interest rate |
| prime rate | what financial banks use to base all their lending rates from loans, mortgages and loc. |
| The economy operates in cycles or waves, recessions lead to contraction in economic activity, which is then followed by ________ activity. | increased |
| All governments around the world have instituted aggressive fiscal (________________) and monetary (___________) to stimulate the market. | spending money . reduced interest rates and QE |
| The ______ in the bank rate has led to a reduction in the prime rate. | reduction |
| why are CPI and inflation not synonomous | CPI measures the change in the price of the basket of goods/services from one time period to the next. Inflation is an increase in the cost, deflation is a decrease in CPI |
| core cpi | measure of all goods and services minus energy and food prices (most volatile) |
| nominal returns | what an investment generates without adjusting for inflation |
| real returns | what your investment earned after adjusting for inflation |
| example: earn 5% on investment (nominal returns) inflation is 2% what is the real return? | 3% |
| What scenario would real returns be higher than nominal returns? | during deflation (negative inflation) |
| purchasing power | the amount of goods/services that can be purchased with a unit of currenct |
| time value of money | money in the present is worth more (greater purchasing power) than the same amount in the future |
| simple annual interest | compound interest annually |
| compound annual interest | multiple periods, weekly, monthly |
| rule of 72 | to determine how long it will take to double the investment. 72/rate |
| secured loans | back your debt with collateral eg. HELOC |
| LOC is a | revolving loan |
| unsecured loans | higher interest rate because no collateral |
| credit cards and loans must quote the __ for the interest rate | APR annual percentage rate |
| what type of loans pledge your home as collateral | mortgages, HELOC, home equity loan |
| when is loan insurance (CMHC) needed for a mortgage? | if down payment is less than 20% |
| loans vs. mortgage | loan that is secured with real estate |
| what is an often second mortgage | HELOC |
| closed mortgage | cannot be prepaid, renegotiated or refinanced before maturity, except according to its terms. The least expensive mortgages tend to be closed mortgages. |
| open mortgage | can be prepaid at any time, without requiring the payment of additional fees. ` |
| fixed-rate mortgage | rate of interest is fixed for a specific period of time (the term). |
| variable rate mortgage | rate of interest may change if other market conditions change. Also known as a floating rate mortgage. |
| Amortization Period | The time over which all regular payments would pay off the mortgage. This is usually 25 years for a new mortgage. |
| term | The length of the current mortgage agreement. A mortgage may be amortized over a long period (ie 25 years) with a shorter term (six months to five years or more). |
| risk and return | the longer the term, the higher the interest rate |
| posted rates vs. best rates | banks often have the capacity to offer lower rates |
| stress test | banks test your ability to pay loan by using current mortgage rate plus 2% |
| how much mortgage can you afford? | monthly housing costs <32% gross monthly income and total monthly debt <40% gross monthly income |
| the first years of a mortgage you pay almost entirely | interest, and little principal |
| Mortgages and loans are similar, but _______ are for property and hence secured by the property. | mortgages |
| The entire life of a mortgage is the ____, ~25 yrs but some people who can't make their monthly payments may opt for a 30 y mortgage, which decreases monthly payments but adds to the total interest over the entire mortgage, not a good idea! | amortization period |
| In the beginning, it is difficult to earn or generate____ in your house because most of the mortgage payment goes to _____ Thus, it is hard to get a second mortgage at the beginning. | equity, interest |
| financial statement | balance sheet, income statement, and cash flow statement |
| what is in income statement | revenue, expenses and profits |
| what is in balance sheet | assets, liabilities and equity |
| what is in cash flow statement | operation, investment, and financing |
| features of balance sheet | -statement at a specific point in time -assets (in order of liquidity) , liabilities, equity -market value of assets |
| accounting equation | assets=liabilities+equity |
| whats an asset | -owned/right to use -has future value -owner has rights |
| current asset | cash, accoutns receivable, inventory, prepaid expense |
| noncurrent/long term asset | -property, plant and equipment -rights and privledges (patents, trademark,etc._ |
| ____ assets are used to generate revenue, they are not for sale to the consumer | long term, sold at some point (residual value) |
| ______ applys to tangible assets and _____ applies to intangible assets | depreciation, amortization |
| historical value = | original cost - amoritization |
| market value= | replacement cost-cost of an equivalent asset |
| example of liability | accounts payable |
| 2 major classifications of liability | current (accounts payable, taxes payable and notes payable) and long term |
| shareholders' equity | net assets of the company or net book value of the company |
| If the company was liquidated, then the ____ would be what the shareholders (owners) would receive after all the debts have been paid. | equity |
| income statement features | period of time -net income=revenues-expenses |
| revenue recognition criteria: | -rev has been earned -amount can be measured -assurance of collect ability of the amount earned |
| cash flow statement features | -period of time -looks at inc/dec liquid assets and liabiliteis |
| 3 section of cash flow statement | cash from : -operating activities -financing activities -investing |
| EBITDA | earnings before interest, taxes, depreciation and amoritization |
| why use EBITDA?* | proxy for cash flow, quick estimate of the value of a company |
| practice valuations | 1. capitalization of earnings (income approach) 2. discounted future cash flows 3. balance sheet - liquidations |
| statue law | legislation, Acts, Codes, Enactments of Municipalities, Bylaws • Passed in Parliament, Legislature, Municipal levels of government. |
| common law | "Judge made law", or precedent setting law, stare decisis ("that what follows") • Created by Judges |
| _________ is a good example of where both Statute and Common exist. | Severance |
| criminal law | relationship between the State and the Individual -summary and indictable convictions |
| civil law | relationship between two indivviduals |
| tort | wrong doing |
| intentional tort | intend to harm or injure |
| unintentional tort | law of negligence |
| vicarious liability | extension of negligence beyond the person who is negligent |
| the agent acts for the principal as if it were the principal acting and with the same authority as if it were the principal | agnecy |
| property ownership has three attributes: | right to own/dispose, right to manage and right to enjoy |
| sole proprietorship | one person owns the entirety of the business but may have many employees |
| partnership | two or more people who together carry on a business and share profits or losses (not always equally) |
| limited liability partnerships | cannot share control of the business, liability limited to what they invested in the partnership |
| corporation | not a individual or partnership, but rather a separate legal entity "person", but no material existence |
| benefits for incorporating | -separate legal entity -limited liability (doesnt apply to vets) -succession is simple -tax avoidance -better access to finacing -continuous existence |
| 5 elements of a contract | capable, mutual agreement, legal consideration, genuinely intended, lawful subject matter |
| contracts in vet med | non-compete, non-solicitate, partnership agreements, shareholder agreements, purchase agreements |
| differences between non-compete and non-solicitation contracts | A non-competition covenant prohibits a former employee from becoming engaged in business that competes with his former employer. A non-solicitation covenant prohibits a former emplovee from soliciting the customers or employees of his former employer |
| mentorship | |
| importance of mentorship in vet med | top reason for either leaving a practice or getting into a practice |
| why have mentorship programs failed in the past? | -mentee must lead and come with goals and objectives, -be bold -don't waste mentors time |
| What is BATNA | Best alternative to a negotiated agreement -what if things don't work out scenario |
| what are the elements of BATNA? | |
| compare and contrast Positional (Distributive) bargaining to Interest Based Bargaining | positional - win/lose. open with extreme position (low ball) interest- win/win, parties seek to find a solution that is best for both |
| bottom line or reservation price | point when negotiator will walk away from negotiation |
| zone of possible agreement (ZOPA) | -zone between two bottom lines of each party, if they do not overlap, no agreement |
| stages of negotiation | prep, initial exchange of info, bargaining, closing |
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