Business Terms

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Business Terms
2011-12-14 17:43:33

Terms for Ch. 18&19
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  1. Who is Tonya Antonucci? and what did she do?
  2. Finance
    The function in a business that acquires funds for the firm and manages those funds within the firm.
  3. Financial Management
    the Job of managing a firm's resources so it can meet its goals and objectives.
  4. Financial Managers
    Managers who examine financial data prepared by accountants and recommend stategies for improving the financial performance of the firm.
  5. Short-Term Forcast
    Forcast that predicts revenues, cost, and expenses for a period of one year or less.
  6. Cash Flow Forcast
    Forcast that predicts the cash inflows and outflows in future periods, usually months or quarters.
  7. Budget
    A financial Plan that sets forth managment's expectaions, and, on the basis of those expectaions, allocates the use of specific resources throughout the firm.
  8. Long-Term Forcasts
    Forcast that predicts revenues, cost, and expenses for a period longer than 1 year, and sometimes as far as 5 or 10 years into the future.
  9. Capital Budget
    A budget that highlights a firm's spending plans for major assets purchased that often require large sums of money.
  10. Cash Budget
    A budget that estimates cash inflows and outflows during a particular period like a month or quarter.
  11. Operating (or master) Budget
    The budget that ties together the firm's other budgets and summarizes its proposed financial activities.
  12. Financial Control
    A Process in which a firm periodically compares its actual revenues, costs, and expenses with its budget.
  13. Capital expenditures
    Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks and copyrights.
  14. Debt Financing
    Funds raised through various forms of borrowing that must be repaid.
  15. Eqity Financing
    Money Raided from within the firm, from operations or through the sale of ownership in the firm (stock)
  16. Short-Term Financing
    Funds needed for a year or less.
  17. long-Term Financing
    Funds needed for more than a year (usually 2 to 10 years)
  18. Trade Credit
    The practise of buying goods and services now and paying for them later.
  19. Promissory Note
    A written contract with a promise to pay a supplier a specific sum of money a a definite time.
  20. Secured loan
    A loan backed by collateral, something valuble such as property.
  21. Unsecured Loan
    A loan that doesn't require any collateral.
  22. Line of Credit
    A given amount of unsecured short-term funds a bank will lend to a business, provided the funds are readily availible.
  23. Revolving Credit Agreement
    A line of credit that's guaranteed but usually comes with a fee.
  24. Commercial Finance Companies
    Organizations that make short-term loans to borrowers who offer tangible assets ass collateral.
  25. Factoring
    The process of selling accounts receivable for cash.
  26. Commercial Paper
    Unsecured promissor notes of $100,000 and up that mature (come due) in 270 days or less.
  27. Term-Loan Agreement
    A promissory note that requires the borrower to repay the loan in specified installments.
  28. Risk/Return trade-off
    The principle that the greater the risk a lender takes in making a loan, the higher the interest rate required.
  29. Indenture terms
    The terms of agreement in a bond issue.
  30. Secrured Bond
    A bond issued with some form of collateral.
  31. Unsecured Bond
    A bond backed only by the reputation of the issuer; also called a debenture bond.
  32. Venture Capital
    Money that is invested in new or emerging companies that are perceived as having great profit potential.
  33. Leverage
    raising needed funds through borrowing to increase a firms rate of return.
  34. Cost of Capital
    The rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders.
  35. Initial Public offering (IPO)
    The first public offering of a corporation's stock.
  36. Investment Bankers
    Specialists who assist in the issue and sale of new securities.
  37. Institutional investors
    Large organizations- such as pension funds, mutual funds, and insurance companies - that invest their own funds or the funds of others.
  38. Stock Exchange
    An organization whose members can buy and sell (exchange) securities for companies and individual investors.
  39. Over-the-counter (OTC) Market
    Exchange that provides a means to trade stocks not listed on the national exchanges.
  40. NASDAQ
    A nationwide electronic system that links dealers accross the nation so that they can buy and sell securities electronically.
  41. Securities and Exchange Commission (SEC)
    Federal agency that has responsibility for regulating the various stock exchanges.
  42. Prospectus
    A condenced version of economic and financial information that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors.
  43. Stocks
    Shares of ownership in a company.
  44. Stocks Certificate
    Evidence of stock ownership that specifies the name of the company, the number of shares it represents, and the type of stock being issued.
  45. Dividends
    Part of a firm's profits that the firm may distribute to stockholders as either cash payments or additional shares of stock.
  46. Common Stock
    The most basic form of ownership in a firm; it confers voting rights and the right to share in the firm's profits through dividends, if approved by the firm's board of directors.
  47. Preferred Stock
    Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold.
  48. Bond
    A corporate certificate indicating that a person has lent money to a firm of to the government.
  49. Maturity Rate
    The exact date the issuer of a bond must pay the principle to the bondholder.
  50. Intererst
    The payment the issuer of the bond makes to the bondholders for use of the borrowers money.
  51. Debenture Bonds
    Bonds that are unsecured, not backed up by any collateral such as equipment
  52. Sinking fund
    A reserve account in which the issuer of a bond periodically retires some part of the bond principle prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond.
  53. Stockbrocker
    A registered representative who works as a market intermediary to buy and sell securities for clients
  54. diversification
    Buying several different investment alternatives to spread the risk of investing
  55. capital gains
    the positive difference between the purchase price of a stcok and its sale price.
  56. stock splits
    an action by a company that gives stockholders two or more shares of stock for each one they own.
  57. buying stock on margin
    purchasing stocks by borrowing some of the purchase cost from the brokerage firm.
  58. mutual fund
    an organization that buys stock and bonds and then sells shares in those securities to the public
  59. junk bonds
    high-risk, high-interest bonds
  60. exchange-traded funds (ETFs)
    collections of stocks and bonds that are traded on exchanges but are traded more like individual staocks than like mutual funds
  61. Dow Jones industrial Average (the Dow)
    the average cost of 30 selected industrial stocks, used to give an indication of the direction (up or down) of the stock market over time.