Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
23 Cards in this Set
- Front
- Back
Obtaining the highest possible return with the minimum use of resources.
|
Efficiency
|
|
Accomplishing a specific task or reaching a goal.
|
Effectiveness
|
|
An absolute number earned on an investment.
|
Profit
|
|
What a business has left from its revenues after paying all expenses, including cost of goods, administrative expenses, overhead, interest, and taxes.
|
Accounting profit
|
|
The amount earned above and beyond what the entrepreneur would have earned if that person had chosen to invest time and money in some other enterprise.
|
Entrepreneurial profit
|
|
The return on investment and is related more to the concept of efficiency than that of effectiveness.
|
Profitability
|
|
The product of two factors:(1) the company's ability to generate income on the amount of revenue it reveices and (2) its ability to maximize sales revenue from proper asset employment.
|
Earning power
|
|
Net profit (income) / Total assets = ?
|
Earning power
|
|
Financing a company with other people's money.
|
Financial leverage
|
|
Occurs when the liabilities of the firm exceed the assets and the business lacks sufficient cash flow to make payments to creditors.
|
Bankruptcy
|
|
Occurs when a business seeks court protection while it develops a plan to pay off its creditors.
|
Chapter 11 bankruptcy
|
|
Requires liquidation of all assets of the business and payment to the creditors.
|
Chapter 7 bankruptcy
|
|
A process of determining how many units of production must be sold before a firm begins to earn a profit.
|
Break-even analysis
|
|
The number of units required to break-even.
|
Break-even quantity
|
|
Fixed Costs / (Price - Variable cost) = ?
|
Break-even quantity (BEQ)
|
|
What the company charges for the product or service.
|
Price
|
|
All costs associated with producing or procuring a product or service that is sold by a firm.
|
Variable costs
|
|
Costs of running a business that are not tied to the amount of production or sales.
|
Fixed costs
|
|
The amount of profit that will be made by a company on each unit that is sold above and beyond the break-even quantity.
|
Contribution margin
|
|
P - VC = ?
|
Contribution margin (in BEQ equation)
|
|
Revenue required to breakeven.
|
Break-even dollars (BE$)
|
|
Fixed Costs / (1 - (Variable costs / Price)) = ?
|
Break-even dollars (BE$)
|
|
Graphical representation of a firm's break-even point.
|
Break-even chart
|