Term
| What is the function in a business that acquires funds for the firm and manages those funds within the firm? |
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Definition
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Term
| What's the job of managing a firm's resources so it can meet its goals and objectives? |
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Definition
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Term
| What are managers who examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm? |
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Definition
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Term
| What are 3 of the most common reasons businesses fail? |
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Definition
| Undercapitalization (insufficient funds to start the business), poor control over cash flow, and inadequate expense control |
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Term
| What is analyzing short-term and long-term money flows to and from the firm? |
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Definition
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Term
| What are the 3 steps of financial planning? |
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Definition
| Forecasting the firm's short-term and long-term financial needs, developing budgets to meet those needs, and establishing financial controls to see whether the company is achieving its goals |
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Term
| Is cash flow a short or long-term forecast? |
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Definition
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Term
| What is a forecast that predicts the cash inflows and outflows in future periods, usually months or quarters? |
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Definition
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Term
| What is a financial plan that sets forth management's expectations, and, on the basis of those expectations, allocates the use of specific resources throughout the firm? |
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Definition
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Term
| What are the 3 most common types of budgets in a firm's financial plan? |
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Definition
| A capital budget, cash budget, and an operating or master budget |
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Term
| What is a budget that highlights a firm's spending plans for major asset purchases that often require large sums of money? |
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Definition
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Term
| What is a budget that estimates cash inflows and outflows during a particular period like a month or a quarter? |
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Definition
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Term
| What is a budget that estimates cash inflows and outflows during a particular period like a month or a quarter? |
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Definition
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Term
| What is a budget that ties together the firm's other budgets and summarizes its proposed financial activities? |
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Definition
| Operating (master) budget |
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Term
| What's another name or a operating budget? |
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Definition
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Term
| What is often the last budget prepared? |
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Definition
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Term
| What budget anticipates borrowing needs, debt repayment, operating expenses, and short-term investments? |
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Definition
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Term
| What is the most detailed budget a firm prepares? |
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Definition
| Operating (master) budget |
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Term
| What is a process in which a firm periodically compares its actual revenues, costs, and expenses in its budget? |
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Definition
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Term
| What are the 4 key areas of operating funds? |
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Definition
| Managing day-to-day needs of the business, controlling credit operations, acquiring needed inventory, and making capital expenditures |
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Term
| What are major investments in either long-term tangible assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights? |
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Definition
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Term
| What are funds raised through various forms of borrowing that must be repaid? |
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Definition
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Term
| What is money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital)? |
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Definition
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Term
| What is the practice of buying goods and services now and paying for them later? |
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Definition
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Term
| What is a written agreement with a promise to pay a supplier a specific sum of money at a specific time? |
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Definition
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Term
| What is a loan backed by collateral (something valuable, such as property)? |
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Definition
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Term
| What is a loan that doesn't require any collateral? |
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Definition
| Unsecured loan (harder to obtain) |
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Term
| What is a given amount of unsecured short-term funds a bank will lend to a business, provided the funds are readily available? |
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Definition
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Term
| Where would a business go to if they are unable to obtain a loan from a bank? |
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Definition
| Commercial financial companies |
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Term
| What is a non-deposit-type organization that makes short-term loan like property, plant, and equipment as collateral? |
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Definition
| Commercial finance company |
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Term
| What generally charges a higher interest rate: a bank or a commercial finance company? |
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Definition
| Commercial finance company, because there is more risk involved |
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Term
| What's the process of selling accounts receivable for cash? |
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Definition
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Term
| What is a market intermediary that agrees to buy a firm's accounts receivable, at a discount, for cash? |
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Definition
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Term
| What are 3 things that set the discount price in factoring? |
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Definition
| Age of the accounts receivable, the nature of the business, and the condition of the economy |
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Term
| What consists of unsecured promissory notes, in amounts of $100,000 and up, that mature or come due in 270 days or less? |
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Definition
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Term
| What states a fixed amount of money the business agrees to pay to the lender on a specific rate at a specified rate of interest? |
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Definition
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Term
| What % of small businesses are rejected for a traditional business loan? |
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Definition
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Term
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Definition
| The National Small Business Association |
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Term
| What amount of small firms use credit cards to finance their businesses? |
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Definition
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Term
| What reduced consumer interest rates and approved many protections for consumers against card company abuses? |
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Definition
| The Credit Card Responsibility Accountability and Disclosure Act |
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Term
| What is borrowing money the company has a legal obligation to pay? |
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Definition
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Term
| What is a promissory note that requires the borrower to repay the loan in specified installments? |
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Definition
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Term
| What's a major advantage of debt financing by borrowing from lending institutions? |
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Definition
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Term
| What's the principle that the greater the risk a lender takes in making a loan, the higher the interest rate required? |
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Definition
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Term
| What is like an IOU with a promise to repay the amount borrowed, with interest, on a certain date? |
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Definition
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Term
| Are bonds short-term or long-term debt? |
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Definition
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Term
| What's another name for a unsecured bond? |
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Definition
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Term
| What makes funds available when owners of the firm sell shares of ownership to outside investors in the form of stock, when they reinvest company earnings in a business, or when they obtain funds from venture capitalists? |
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Definition
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Term
| What is the first time a company offers to sell its stock to the general public? |
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Definition
| Initial public offering (IPO) |
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Term
| What is the most favored way of meeting long-term capital needs? |
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Definition
| Equity financing from retained earnings |
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Term
| What are the 2 types of debt-financing? |
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Definition
| Borrowing from lending institutions and by issuing bonds |
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Term
| What are the 3 types of equity financing? |
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Definition
| Selling stock, retained earnings, and venture capital |
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Term
| What is money that is invested in new or emerging companies that are perceived as having great profit potential? |
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Definition
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Term
| Who invests in a company in return for part ownership and some control of the business? |
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Definition
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Term
| What is raising needed funds through borrowing to increase a firm's rate of return? |
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Definition
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Term
| What is the rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders? |
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Definition
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