EEE 2023 Final Exam Graded A+

Accounts Receivable - ANSWER-the money owed to a firm by its customers assumption sheet - ANSWER-an explanation in a new firm's business plan of the sources of the numbers for its financial forecast and the assumptions used to generate them Balance Sheet - ANSWER-a snapshot of a company's assets, liabilities and owner's equity at a specific point in time break-even point - ANSWER-the point where total revenue received equals total costs associated with the output budgets - ANSWER-itemized forecasts of a company's income expenses, and capital needs that are also important tools for financial planning and controlling constant ratio method of forecasting - ANSWER-a forecast approach using the precent of sales method in which expense items on a firm's income statement are expected to grow at the same rates as sales cost of sales - ANSWER-all of the direct costs associated with producing or delivering a product or service, including the material costs and direct labor costs current assets - ANSWER-cash plus items that are readily convertible to cash, such as accounts receivable, inventories, and marketable securities current liabilities - ANSWER-obligations that are payable within a year, including accounts payable, accrued expenses and the current portion of long-term debt current ratio - ANSWER-a ratio that equals the firm's current assets divided by its current liabilities debt-to-equity ratio - ANSWER-a ratio calculated by dividing the firm's long-term debt by its shareholders' equity efficiency - ANSWER-how productively a firm utilizes its assets relative to its rate of return financial management - ANSWER-the process of raising money and managing a company's finances in a way that achieves the highest rate of return financial ratios - ANSWER-ratios showing the relationship between items on a firm's financial statements that are used to discern whether a firm is meeting its financial objectives and how it stacks up against industry peers financial statement - ANSWER-written reports that quantitatively describe a firm's financial health financing activities - ANSWER-activities that raise cash during a certain period by borrowing money or selling stock, and/or use cash during a certain period by paying dividends, buying back outstanding stock, or buying back outstanding bonds fixed assets - ANSWER-assets used over a longer time frame, such as real estate, buildings, equipment and furniture forecasts - ANSWER-estimates of a firm's future income and expenses, based on its past performance, its current circumstances and its future plans historical financial statements - ANSWER-reflect past performances and are usually prepared on a quarterly and annual basis income statement - ANSWER-a financial statement that reflects the results of the operations of a firm over a specified period of time: prepared on a monthly, quarterly, and annual basis inventory - ANSWER-a company's merchandise, raw materials, and products waiting to be sold investing activities - ANSWER-activities that include the purchase, sale or investment in fixed assets, such a real estate or buildings liquidity - ANSWER-the ability to sell a business or other assets quickly at a price that is close to market value; also, a company's ability to meet its short-term financial obligations long-term liabilities - ANSWER-notes or loans that are repayable beyond one year, including liabilities associated with purchasing real estate, buildings and equipment net sales - ANSWER-total sales minus allowances for returned goods and discounts operating activities - ANSWER-activities that affect net income (or loss), depreciation, and changes in current assets and current liabilities other than cash and short-term debt operating expenses - ANSWER-marketing, administrative costs, and other expenses not directly related to producing a product or service other assets - ANSWER-miscellaneous assets including accumulated goodwill owner's equity - ANSWER-the equity invested in the business by its owner(s) plus the accumulated earnings retained by the business after paying dividends percent-of-sales method - ANSWER-the method of expressing each expense item as a percent of sales price-to-earnings ratio (P/E) - ANSWER-a simple ratio that measures the price of a company's stock against its earnings pro forma balance sheet - ANSWER-financial statements that show a projected snapshots of a company's assets, liabilities and owner's equity at a specific point in time pro forma financial statements - ANSWER-projections for future periods, based on a firm's forecast, and typically completed for two to three years in the future pro forma income statement - ANSWER-a financial statement that shows the projected results of the operations of a firm over a specific period pro forma statement of cash flows - ANSWER-a financial statement that shows the projected flow of cash into and out of a company for a specific period profit margins - ANSWER-a measure of a firm's return on sales that is computed by dividing net income by average net sales profitablility - ANSWER-the ability to earn a profit regression analysis - ANSWER-a statistical technique used to find relationships between variables for the purpose of predicting future values sales forecast - ANSWER-a projection of a firm's sales for a specific period (such as a year); most firms though forecast their sales for two to five years in the future stability - ANSWER-the strength and vigor of the firm's overall financial posture statement of cash flows - ANSWER-a financial statement summarizing the changes in a firm's cash position for a specific period of time and detailing why the changes occurred. Similar to a month end bank statement, it reveals how much cash is on hand at the end of the month as well as how the cash was acquired and spent during the month working capital - ANSWER-a firm's current assets minus its current liabilities advising board - ANSWER-a panel of experts who are asked by a firm's managers to provide counsel and advise on an outgoing basis; unlike a board of directors, an advisory board possesses no legal responsibilities for the firm and gives non binding advice board of directors - ANSWER-a panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm consultant - ANSWER-an individual who gives professional or expert advice. Consultants fall into two categories: paid consultants and consultants who are made available for free or at a reduced rate through a nonprofit or governmental agency employee - ANSWER-someone who works for a business, at the business's locations or virtually, utilizing the business's tools ad equipment and according to the business's policies and procedures freelancer - ANSWER-a person who is in business for themselves, works on their own time with their own tools and equipment, and performs services for a number of different clients founding team - ANSWER-a team on individuals chosen to start a new venture; has an advantage over firms started by an individual because a team brings more talent, resources, ideas and professional contacts to a new venture than does a sole entreprenuer heterogeneous team - ANSWER-a team whose individual members are diverse in terms of the abilities and experiences homogeneous team - ANSWER-a team whose individual members' experiences and areas of expertise are very similar to one another inside director - ANSWER-a person on a firm's board of directors who is also an officer of the firm intern - ANSWER-a person who works for a business as an apprentice or trainee for the purpose of obtaining practical experience liability of newness - ANSWER-situation that often causes new firms to falter because the people who start the firms can't adjust quickly enough to their new roles, and because the firm lacks a "track record" with the customers and suppliers networking - ANSWER-building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm new-venture team - ANSWER-the group of founders, key employees, and advisors that move a new venture from an idea to a fully functioning firm outside director - ANSWER-someone on a firm's board of directors who is not employed by the firm prior entrepreneurial experience - ANSWER-prior start up experience; this experience has been found to be one of the most consistent predictors of the future entrepreneurial performance relevant industry experience - ANSWER-experience in the same industry as an entrepreneur's current venture that includes a network of industry contacts and an understanding of the subtleties of the industry signaling - ANSWER-the act of a high-quality individual agreeing to serve on a company's board of directors, which indicates that the individual believes that the company has the potential to be successful skills profile - ANSWER-a chart that depicts the most important skills that are needed and where skills gaps exist virtual assistant - ANSWER-a freelancer who provides administratve, technical or creative assistance to clients remotely from a home office 7(A) loan guaranty program - ANSWER-the main Small Business Administration (SBA) program available to small businesses operating through private sector lenders providing loans that are guaranteed by the SBA: loan guarantees reserved for small businesses that are unable to secure financing through normal lending channels accredited investor - ANSWER-a person who is permitted to invest in high-risk investments such as business start-ups bootstrapping - ANSWER-using creativity, ingenuity, or any means possible to obtain resources other than borrowing money or raising capital from traditional sources burn rate - ANSWER-the rate at which a company is spending its capital until it reaches profitability business angels - ANSWER-individuals who invest their personal capital directly in new ventures carry - ANSWER-the percentage of profits that the venture capitalist gets from a specific venture capital fund corporate venture capital - ANSWER-a type of capital similar to traditional venture capital, except that the money comes from corporations that invest in new ventures related to their areas of interest crowdfunding - ANSWER-a method of funding in which people pool their money and other resources, usually via the internet, to support efforts initiated by other people or organizations debt financing - ANSWER-getting a loan; most common sources of debt financing are commercial banks and Small Business Administration's (SBA) guaranteed loan program due diligence - ANSWER-the process of investigating the merits of a potential venture and verifying the key claims made in the business plan elevator speech (or pitch) - ANSWER-a brief, carefully constructed statement that outlines the merits of a business opportunity equity-based crowdfunding - ANSWER-this type of funding helps businesses raise money by tapping individuals who provide funding in exchange for equity in the business equity financing - ANSWER-a means of raising money by exchanging partial ownership in a firm, usually in the form of stock for funding factoring - ANSWER-a financial transaction whereby a business sells its accounts receivable to a third party, called a factor, at a discount in exchange for cash final prospectus - ANSWER-documents issued by the investment bank after the Securities and Exchange Commission (SEC) has approved the offering that sets a date and issuing price for the offering follow-on funding - ANSWER-additional funding for a firm following the initial investment made by investors general partners - ANSWER-the venture capitalists who manage a venture capital fund initial public offering (IPO) - ANSWER-the first sale of a company's stock to the public and an important milestone for a firm for four reasons: it is a way to raise equity capital; it raises a firm's public profile; it is a liquidity event; and it creates another form of currency (company stock) that can be used to grow the company investment bank - ANSWER-a financial institution that acts as an underwriter or agent for a firm issuing securities lease - ANSWER-a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specific period of time in exchange for regular payments limited partners - ANSWER-participants in a partnership, such as a venture capital fund, which have limited liability, meaning that they are only liable up to the amount of their investment and have o management authority line of credit - ANSWER-a borrowing "cap" is established and borrowers can use the credit at their discretion; requires periodic interest payments liquidity event - ANSWER-an occurrence such as a new venture going public, finding a buyer, or being acquired by another company that converts some or all of a company's stock into cash merchant cash advance - ANSWER-a common type of alternative lending peer-to-peer lending - ANSWER-a category of financial transactions which occur directly between individuals or "peers" preliminary prospectus - ANSWER-a document issued by an investment bank that describes the potential offering to the general public while the SEC is conducting an investigation of the offering private placement - ANSWER-a variation of the IPO in which there is a direct sale of an issue of securities to a large institutional investor rewards-based crowdfunding - ANSWER-this type of funding allows entrepreneurs to raise money in exchange for some type of amenity or reward road show - ANSWER-a whirlwind tour taken by the top management team of a firm wanting to go public; consists of meetings in key cities where the firm presents its business plan to groups of investors rounds - ANSWER-stages of subsequent investments made in a firm by investors Sarbanes-Oxley Act - ANSWER-a federal law that was passed in response to corporate accounting scandals involving prominent corporations, like Enron and WorldCom SBA Guaranteed Loan Program - ANSWER-an important source of funding for small businesses in general in which approximately 50% of the 9000 banks in the United States participate SBIR Program - ANSWER-Small Business Innovation Research competitive grant program that provides over $1 billion per year to small businesses for early stage and development projects secondary marketing offering - ANSWER-any later public insurance of shares after the initial public offering single-purpose loan - ANSWER-one common type of loan in which a specific amount of money is borrowed that must be repaid in a fixed amount of time with interest STTR program - ANSWER-a government grant program, similar to the SBIR program, which requires the participation of a research organization, such as a research university or a federal laboratory sweat equity - ANSWER-the value of the time and effort that a founder puts into a new firm vendor credit - ANSWER-a form of credit in which a vendor extends credit to a business in order to allow the business to buy its products and/or services upfront but defer payment until later venture capital - ANSWER-the money that is invested by venture capital firms in start ups and small businesses with exceptional growth potential venture-leasing firms - ANSWER-firms that act as brokers, bringing the parties involved in a lease together (e.g. firms acquainted with the producers with new ventures that are in need of the equipment) advertising - ANSWER-making people aware of a product or service in hopes of persuading them to buy it brand - ANSWER-the set of attributes - positive or negative - that people associate with a company brand equity - ANSWER-the set of assets and liabilities that is linked to a brand and enables it to raise a firm's valuation brand management - ANSWER-a program that protects the image and value of an organization's brand in consumer's minds buzz - ANSWER-an awareness and sense of anticipation about a company and its offerings cost-based pricing - ANSWER-a pricing method in which the list price is determined by adding a markup percentage to the product's cost disintermediation - ANSWER-the process of eliminating layers of intermediaries, such as distributors and retailers, to sell directly to customers distribution channel - ANSWER-the route a product takes from the place it is made to the customer who is the end user exclusive distribution arrangements - ANSWER-an agreement that gives a retailer or other intermediary the exclusive rights to sell a company's products in a specific area for a specific period of time guerilla marketing - ANSWER-a low budget approach to marketing that relies on ingenuity, cleverness and surprise rather than traditional technique market segmentation - ANSWER-the process of studying the industry in which a firm intends to compete to determine the different potential target markets in that industry marketing mix - ANSWER-the set of controllable, tactical marketing tools that a firm uses to produce the response it wants in the target market; typically organized around the four Ps- product, price, promotion and place niche market - ANSWER-a place within a large market segment that represents a narrow group of customers with similar interests place - ANSWER-the marketing mix category that encompasses all of the activities that move a firm's product from its place of origin to the customer press kit - ANSWER-a folder typically distributed to journalists and made available online that contains background information about a company and includes a list of the company's most recent accomplishments price - ANSWER-the amount of money consumers pay to buy a product; one of the four Ps in the marketing mix price-quality attribution - ANSWER-the assumption consumers naturally make that the higher price product is also the better quality product product - ANSWER-the element of the marketing mix that is the good or service a company offers to its target market; often thought of as something having physical form product attribute map - ANSWER-a map that illustrates a firm's positioning strategy relative to it's major rivals promotion - ANSWER-the marketing mix category that includes he activities planned by a company to communicate the merits of its product to its target market with the goal of persuading people to buy the product public relations - ANSWER-the efforts a company makes to establish and maintain a certain image with the public through networking with journalists and others to try to interest them in saying or writing good things about the company and its products reference account - ANSWER-an early user of a firm's product who is willing to give a testimonial regarding his or her experience with the product sales process - ANSWER-the systematic process a business engages in to identify prospects and close sales service - ANSWER-an activity or benefit that is intangible and does not take on a physical form, such as an airplane trip or advice from an attorney social plug-ins - ANSWER-tools that websites uses to provide its users with personalized and social experiences tagline - ANSWER-a phrase that is used consistently in a company's literature, advertisements, promotions, stationery and even invoices to develop and to reinforce the position the company has staked out in its market trade show - ANSWER-an event at which goods and services in a specific industry are exhibited and demonstrated value-based pricing - ANSWER-a pricing method in which the list price is determined by establishing what consumers are willing to pay for a product and then backing off a bit to provide a cushion viral marketing - ANSWER-a new marketing technique that facilitates and encourages people to pass along a marketing message about a particular product or service assignment of invention agreement - ANSWER-a document signed by an employee as apart of the employment agreement that assigns the employer the right to apply for the patent of an invention made by the employee during the course of his or her employment business method patent - ANSWER-a patent that protects an invention that is or facilitates a method of doing business certification marks - ANSWER-marks, words, names, symbols, or devices used by a person other that its owner to certify a particular quality about a product or service collective marks - ANSWER-trademarks or service marks used by the members of a cooperative, association, or other collective group including marks indicating membership in a union or similar organizations