Term
| Internal vs. External Constraints |
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Definition
| internal -- things that have occurred in the past within the company that are still currently affect the company -- things that are currently occurring in the external environment that are affecting the company |
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Term
| What must a team do in order to get a new stadium? |
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Definition
| Increase public attention or at least give the impression that the stadium will increase attention |
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Term
| Benefits of a new stadium |
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Definition
| Increased public attention, more ticket sales, new sponsorship opportunities |
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Term
| Revenue vs. Expenses and examples |
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Definition
Revenue = cash coming in; ex: tickets, broadcast contracts, concessions, sponsorships
Expenses = costs that are incurred; ex: salaries, equipment, travel, rent, insurance |
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Term
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Definition
| finance looks at what will or should happen, accounting is what DID happen |
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Term
| 4 maneuvers used by owners to show a loss of money |
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Definition
1) Owners receive salaries from their teams
2) Shifting revenue among different entities (team, stadium, broadcasting, etc)
3) Subchapter S corporations
4) Veeck Tax Shelter Convention |
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Term
| How do teams use a Subchapter S corporation to show a loss of money |
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Definition
| shareholders report gains/losses on the individual 1040 according to proportional share |
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Term
| Marketable securities (def) |
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Definition
| instruments so widely accepted and purchased by others that they are very similar to cash |
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Term
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Definition
| U.S. Treasury bills, Commercial paper |
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Term
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Definition
| Corporate bonds, Common stocks |
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Term
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Definition
Can run numerous sport entities at a time.
Most sports organizations throughout the world are owned or operated by gov't entities.
Olympic programs are Gov't entities |
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Term
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Definition
-Business owned by a single person
-Most businesses in the world and Sole Proprietorship
-Independent contractors such as pro bowlers, figure skaters, and race car drivers are sole proprietorships |
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Term
| General vs. Limited partnerships |
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Definition
General -- individuals/groups combine resources to work together
Limited -- One partner manages and the others are only financial managers |
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Term
| Subchapter S Corporations |
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Definition
-May have up to 100 shareholders
-Must be based in U.S.
-Can own subsidiaries |
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Term
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Definition
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Term
| Limited Liability Corporations |
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Definition
| Benefits of corporations and partnerships w/o the drawbacks of typical corporations |
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Term
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Definition
current is highly liquid -- cash, a/r, inventory, etc.
fixed is not liquid -- PP&E |
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Term
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Definition
| current assets - current liabilities |
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Term
| Current ratio; formula & explain |
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Definition
(current assets)/(current liabilities)
measures if the sale of current assets will cover current liabilities |
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Term
| Acid test ratio (quick ratio) |
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Definition
(Cash + short term investments + Net Receivables)/(current liabilities)
examines whether a firm can pay its current liabilities without relying on the sale of inventories |
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Term
| Total asset turnover ratio |
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Definition
(total revenue)/(avg. total assets)
how effectively the firm uses its assets to generate sales |
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Term
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Definition
(COGS)/(Avg. inventory)
How many times during the year inventory is purchased and sold |
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Term
| Receivable turnover ratio |
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Definition
(Net Credit Sales)/(Avg. Net receivables)
how often your receivables are collected |
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Term
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Definition
(Total Liabilities)/(Total Assets)
high ratio = greater chance for distress/bankruptcy |
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Term
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Definition
(net income)/(revenues)
measures the extent to which a business is profitable |
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Term
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Definition
(net income)/(avg. total assets)
measures amount of profits earned on the investment in all assets of the firm |
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Term
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Definition
| (net income)/(avg. stockholders' equity) |
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Term
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Definition
| (increase/decrease in value) + dividends |
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Term
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Definition
| (Net income)/(avg. # of shares outstanding) |
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Term
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Definition
| (dividends per share)/(earnings per share) |
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Term
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Definition
| (price per share)/(earnings per share) |
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Term
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Definition
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Term
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Definition
FV = C*(1+r)^t
C = initial amount of cash that is invested today
r = interest rate or rate of return
t = number of years the cash is invested |
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Term
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Definition
Single cash flow per year forever in the future
If perpetuity pays $100 per year, interest rate of 8%, PV = $100/.08, PV = 1,250 |
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Term
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Definition
| allows a business to compare itself with other similar businesses |
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