Chapter 17 - Opportunities & Challenges in Managing Assets
Commerce 1800 with Kemp at University of Virginia
About this deck
By: Adria Penatzer
Textbook:
Understanding Business
Created: 2011-11-17
Size: 67 flashcards
Views: 36
Textbook:
Understanding BusinessCreated: 2011-11-17
Size: 67 flashcards
Views: 36
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asset
an economic resource that the business owns and uses to make an operating profit and create value
current asset
short-term asset; cash or expected to be turned into cash within one year
non-current asset
long-term asset that is not expected to be turned into cash within one year
working capital
current assets
operating cycle
time that elapses between the time the inventory is purchased and the time the cash is collected from the customer
current liabilities
account payable and other debts a business must pay within one year
net working capital
current assets less current liabilities
cash
currency and money a business has in its checking and other bank accounts
transaction demand
a business needs cash to pay its bills
precautionary demand for money
a business needs cash in case bad and unexpected events happen
speculative demand for money
a business needs cash to be able to take advantage of unique opportunities
marketable securities
short-term investments a business makes in financial securities, which are low risk
liquid
can be easily sold and turned into cash
recievable
a claim on another person or business
allowance for bad debts
the business must recognize that some of its customers will not pay their receivables
net receivables
accounts receivable, less allowance for bad debts; represents the amount of money the business expects to receive from its customers
bad-debt expense
the amounts a business does not collect
trade discount
a customer's discount for paying their debt to the business early
inventory
the store of goods that a business owns and sells to customers
purchased inventory
goods that are purchased by a business, to be resold without modification, as is
produced inventory
goods that are purchased by a business to be modified and converted into another good
raw materials
inputs like steel and plastic needed to produce inventory
work-in-process
inventory in the transofmration of the raw materials into a finished product
finished goods
inventory is finished being produced
consignment
where a business holds and sells inventory that is owned by another business or person
prepaid expense
cost paid by the business prior to receiving the benefit from the cost
tangible assets
can be touched such as property, plant, & equipment
intangible assets
cannot be touched
property, plant, & equipment (PP&E)
physical assets most people associate with a business beyond the business's product; AKA facilities or fixed assets
land
part of the physical surface of the Earth
building
a physical structure attached to land
depreciation
an estimate of how much a non-current, tangible asset declines in value in a given period
net book value
value of original cost less accumulated depreciation/amortization
depreciation expense
estimated decrease in value in each period; also a cost of that period
equipment
a phsyical, non-current asset that a business uses that is not considered land or buildings
leasing
where one party (the lessee) pays the owner of the property (the lessor) a fee to use the property for a specific time period
rent
the fee associated with a lease; a cost of doing business
lease
contract between the lessor and lessee
operating lease
lease for a small part of the asset's useful life
captial/capitalized lease
lease for all or most of the asset's useful life
amortization expense
estimate of decline in value of an intangible asset over a period; cost of that period
patent
gives the owner the exclusive right to use the patented idea, process, or product
Federal Patent Statue of 1952
current law that governs patents
United States Patent and Trademark Office (PTO)
government agency that oversees the granting of patents
patent infringement
when another business or person is illegally using a patented idea, product, or process
US Court of Appeal for the Federal Circuit
created in 1982 to jedge patent lawsuits
copyright
gives the author the exclusive right to use that work
public domain
where a previously copyrighted work enters after copyright period ends; work can be used by anyone
Copyright Revision Act of 1976
law that currently governs copyrights
United States Copyright Office
government agency that oversees the granting of patents
copyright infringement
when another business or person is illegally using a copyright
trademark
a distinctive mark, symbol, name, word, motto, or device that identifies the products of a business
Federal Trademark Act of 1946
law that currently governs copyrights
trademark infringement
when another business of peson is illegally using a trademark
generic name
a name that becomes a common name for a product line
goodwill
the value of a business that exceeds the value of its tangible and intangible assets
cash-to-expense ration
measure to help manage a business's liquidity; measures how many days of operating expenses a business holds in cash and marketable securities
accounts receivable turnover
measures how many times a year a business converts its accounts receivable into cash
accounts receivable collection period
measures how many days it takes to collect accounts receivable
safety stock
extra inventory to prevent against an over demand for a product
inventory turnover
measures how many times a year a business converts its inventory into sales
days' sales in inventory
compares the level of inventory to the inventory sold per day
fixed-asset turnover
measures the relationship between a business's investment in PP&E versus the business's sales
net present value (NPV)
measures the expected long-term value of investing in PP&E and related working capital versus the cost of investing in PP&E
internal rate of return (IRR)
rate of return an investment in PP&E and related working capital earns over time
payback
amount of time it takes for the business to receive cash that is equal to the cost of the PP&E
return on assets (ROA)
common measure used to evaluate the investment in total assets
About this deck
By: Adria Penatzer
Textbook: Understanding Business
Created: 2011-11-17
Size: 67 flashcards
Views: 36
Textbook:
Understanding BusinessCreated: 2011-11-17
Size: 67 flashcards
Views: 36
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have used this website for three exams, and I see a huge difference in my test results.”
Naj
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