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DECA Finance Vocab
Financial Cluster Exam Vocab
| Term | Definition |
|---|---|
| Phishing | When a reputable firm/agency sends communication to a person asking for sensitive info. |
| Ponzi Scheme | Investor Fraud that pays existing investors with funds collected from new investors |
| Affinity Fraud | Investment fraud where a con artist targets members of a specific demographic |
| Tax Deduction | A provision that reduces taxable income |
| Customer Life Cycle | Measurement of customer data that show business’s performance |
| Progressive Tax Structure | A tax system where you tax higher income citizens more and lower income citizens less |
| Brokerages | A intermediary who connects a seller and buyer to facilitate a transition |
| Credit Unions | Similar to banks, credit unions accept deposits and make loans but as member-owned and cooperative institutions, they are known as a safe place that has reasonable rates |
| Savings & Loan Association | These types of associations collect savings from the public and lend this money to individuals through mortgage loans |
| Short-Term Debt | Debt that must be paid within a year |
| Long-Term Debt | Debts a company owes that are payable beyond a year |
| Short-Term Equity Securities | Short term ownership in a firm/company that can be converted to an asset quickly |
| Long-Term Equity Securities | Equity in affirm that can be converted to an asset past a year |
| Convergence | When firms merge together |
| Consolidation | When firms buy other firms |
| Industrial-Based Market | All industries that acquire goods that enter the production of other products sold |
| Recession-Proof Economy | Refers to an economy that does not decline in value during recession |
| Emerging Market Economy | Economy of a developing nation is starting to be more engaged internationally |
| Integrated Financial Market | A market where there are no barriers to financial flows |
| Bonds | Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan. |
| Accounting Software | Manages day to day transactions of a firm’s spending/budget |
| Income Statement | Shows a company’s revenue and losses during a period of time |
| Statement of Equity | A component of balance sheet that addresses budgetary concerns, manages stocks, and helps makes financial adjustments |
| Dividends Paid | Payment from an entity to its shareholders |
| Sunk Costs | Cost that has already happened and can’t be recovered |
| Outsourcing | When one company hires another company to be in responsible for an event |
| Marginal Analysis | Examination of potential costs/benefits associated with a decision |
| Financial-Information Management Function | Supports integration of a business’s management processes |
| Electronic Data Interchange | Businesses communication information traditionally communicated through paper |
| Benchmarking | When you compare performance/assets to the rest of the industry |
| Ratio Analysis | Taking financial ratios from a company to try and determine financial strength |
| Sustainability Report | A report that communicates environmental, social, and governance goals of a company and progress towards them |
| Types of Debtor-Creditor Relationship | Two types are voluntary and involuntary. Voluntary is most common, it is when a person purchases anything and willingly incurs the debt. An involuntary relationship arises with operation of law or judicial proceedings. |
| What do Roth IRAs do? | You contribute after-tax dollars and your contributions grow in value tax-free and you can withdraw with no penalty after 59.5 |
| Over the Counter Securities | Over the Counter securities are not listed on a major exchange and are listed on a broker-dealer network |
| Under the Table | Economic activities that are illegal in nature such as prohibited goods |
| Derivative | Financial contracts set between two or more parties that derive value from underlying asset, group of assets, or benchmark |
| Zero-Based Modeling | Budgeting technique where all expenses must be justified for a new period/year starting from zero |
| Debt Based Modeling | Take cash flow model to determine level of potential debt |
| Line of Credit | Credit facility extended by a bank/institution that enables customer to draw on the institution when funds are needed |
| Lean-Focused Organizations | Structure designed to create more customer value with fewer resources |
| Intrinsic | Natural or necessary to how something functions |
| Extrinsic | Not part of the essential nature of something |
| Concomitant | Naturally accompanying or associated |
| Vocational | Relating to an occupation or employment |
| Commodities Investor | Invest in raw materials or agricultural products |
| Financial Holding Company | A financial company engaged in a broad range of banking activities |
| Tort | A wrongful act or an infringement of a right (other than under contract) leading to civil legal liability |
| Transmittal | A brief letter or note sent with a document or parcel to explain the contents |
| Grapevine | Communication that occurs in an organization without adhering to a prescribed framework |
| Matrix-Organizational Structure | A cross-collaborative effort to position the right people in the right teams. |
| Cash Flow Statement | A financial statement that provides aggregate data regarding all cash inflows that a company receives from its ongoing operations and external investment sources. |
| Balance Sheet | A balance sheet summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. A part of the financial statement. |
| Debt Financing | Occurs when a company raises money by selling debt instruments to investors |
| Vertical Analysis | The comparison of financial statements by representing each line item on the statement as a percentage of another line item |
| Horizontal Analysis | A financial analysis technique used to evaluate a company's performance over time |
| Liabilities | The debts you owe to other parties. |
| Open Corporation | An open corporation is a corporation whose ownership shares are available for exchange on a public market. |
| S Corporation | Corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes |
| Close Corporation | A close corporation is a corporation whose ownership interests, i.e., the shares of the corporation, are not available for exchange on any public market. |
| Liquidity | The ease by which shareholders are able to exchange their interests in the company. |
| Federal Trade Commission | Works to prevent fraudulent, deceptive, and unfair business practices. They also provide information to help consumers spot, stop, and avoid scams and fraud. |
| Consumer Product Safety Commission | Protects the public from unreasonable risks of serious injury or death from thousands of types of consumer products under its jurisdiction, including products that pose a fire, electrical, chemical, or mechanical hazard or can injure children. |
| Consumer Financial Protection Bureau | Implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive |
| Tax-Deferred Investment | Where you pay federal income taxes when you withdraw money from your investment, instead of paying taxes up front. |
| Double Taxation | Income tax being levied twice on the same income. It most commonly applies to corporations and their shareholders. (Corporation taxed on its earnings/profits, shareholders taxed again on dividends & capital gains they receive from those earnings.) |
| Capital Gain | The increase in the value of an asset over time. If you buy stock for $100 and its value rises to $300, you have accrued a capital gain of $200. |
| Tax-Exempt Funds | Mutual funds invested in government or municipal bonds are often referred to as tax-exempt funds because the interest generated by these bonds is not subject to income tax. |
| Subsidies | A sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive. |
| Low-Context Culture | In a low-context culture, information has to be explicit and detailed for the message to be conveyed without distortion. |
| High-Context Culture | High-context communicators attach great importance to everything that surrounds the explicit message, including interpersonal relationships, non-verbal cues, and physical and social settings. |
| Promissory Note | Debt instrument that contains a written promise by one party to pay another party a definite sum of money, either on-demand or at a specified future date. |
| Role of an Investment Bank | Advise businesses and governments on how to meet their financial challenges. Help clients with financing, research, trading and sales, wealth management, asset management, IPOs, mergers, securitized products, hedging, and more. |
| Role of a Credit Union | Promote the well-being of their members. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates. |
| Role of a Commercial Bank | Provide basic banking services and products to the public, individual consumers and small-midsize businesses. Services: checking and savings accounts; loans & mortgages; basic investment services such as CDs; and other services such as safe deposit boxes. |
| Role of a Brokerage Bank | Help with investing in securities, buying and selling real estate, obtaining mortgages and loans and buying and selling insurance premiums. |
| Role of a Savings & Loan Association | Specialized in offering residential mortgage loans and accepting savings deposits. |
| Role of an Internet Bank | Allows a user to conduct financial transactions via the Internet |
| Role of an Insurance Company | Reduce financial uncertainty and make accidental loss manageable |
| Role of a Mortgage Company | Underwrites and issues (originates) its own mortgages to homebuyers, using their own capital to issue the loans. |
| Call Market | Where market participants place orders to buy or sell at certain bid or offered (ask) prices, which are then batched together and matched at predetermined time intervals |
| Commodities Market | Marketplace for buying, selling, and trading raw materials or primary products. |
| Role of a Managerial Accountant | Put together and present financial reports that give senior managers insights into an organization's performance. |
| Fixed Overhead | Costs that remain the same regardless of production or sales volume (utility bills, materials, labor costs) |
| Selling Price | The price being asked by the retailer |
| Purchase Price | Price you actually pay |
| Stewardship | Taking responsibility for the business and the effects it has on the world around it |
| Disparate Data | Any data that are essentially not alike, or are distinctly different in kind, quality, or character. |
| Insider Trading | The trading of a company's securities by individuals with access to confidential or material nonpublic information about the company |
| Auditing | Examination or inspection of accounts and the physical checking of inventory to make sure that all departments are following documented system of recording transactions |
| Master Budget | A company's central financial planning document |
| Cash Flow Budget | Tracking the timing of your income and expenses to make sure you have enough from week to week |
| Financial Budget | The process of planning company expenses and revenues for a time period |
| Operational Budget | A detailed projection of what a company expects its revenue and expenses will be over a period of time |
| Due Diligence | A process that involves risk and compliance check, conducting an investigation, review, or audit to verify facts and information about a particular subject. |
| Law of Diminishing Returns | Profits or benefits gained from something will represent a proportionally smaller gain as more money or energy is invested in it. |
| Benford's Law | Relative frequency distribution for leading digits of numbers in datasets. Statistical tool that flags anomalies & discrepancies in a transaction data set to detect interventions/compromises undermining a data set's integrity to determine whether data on |
| Concurrent Engineering | The process of using technology to automatically connect and communicate product data across globally distributed engineering teams using one or more design tools |
| Process Performance Managemant | An ongoing series of meetings and check-ins between a manager and employee that plans, monitors, and reviews the employee's objectives, long-term goals, and overall impact on the company |
| Taguchi Method | Emphasizes the roles of research and development (R&D), and product design and development in reducing the occurrence of defects and failures in manufactured goods. |
| Statistical Process Control | Monitors manufacturing processes with technology that measures and controls quality. |
| Accounts-Payable | Short-term debt and a liability on a balance sheet where a business owes money to its vendors/suppliers that have provided the business with goods or services on credit. |
| Responsibilities of The Board of Directors | Recruit, supervise, evaluate, compensate the manager Direct the org Establish a policy based governance system Govern the org & relationship with the CEO Protect the org’s assets and member’s investment Monitor and control function |
| Trade Association | 'not-for-profit organization' made up of a collection of companies and/or individuals with common interests or who work in the same industry. |
| Captive Insurance Company | Represents those who want to take financial control and manage risks by underwriting their own insurance rather than paying premiums to third-party insurers. |
| Enterprise Risk Management | Identifying, analyzing and treating the exposures an organization faces as seen by the executive levels of management |
Created by:
SuhasNallam
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