Marketing Management

1. Marketing Management Indicator 2.03

2. Terms • Accounting equation – Assets = Liabilities + Capital • Accounts payable -- Money which a company owes to vendors for products and services purchased on credit • Accounts receivable – Money that is owed to the company by clients • Amortization-- the paying off of debt in regular installments over a period of time • Assets – resources of monetary value owned by the business • Balance sheet – a financial statement that lists the assets, liabilities, and capital of a business of a specific date • Capital surplus -- Equity which cannot otherwise be classified as capital stock or retained earnings. • Cash flow – the movement of funds into and out of a business; determines the amount of cash the business has to work with at any given time • Cash flow statement – a financial summary with estimates as to when, where, and how much money will flow into and out of a business • Cost of goods sold – the amount of money a business pays for the product it will sell • Depreciation– decrease in the value of an asset due to wear and age • Discontinued operations – a part of a business that has been sold or abandoned

3. Terms • Goodwill– the customer’s positive feelings about an organization, product, or service • Gross profit – money left after the cost of goods expense is subtracted from total income • Income statement – a summary of a business’s income and expenses over a period of time • Liabilities – Debts owed by the company • Minority interests -- a significant but non-controlling ownership of less than 50% of a company's voting shares by either an investor or another company. • Operating expenses – all expenses involved in running a business • Net income -- money remaining after operating expenses are subtracted from gross profit • Net worth - For a company, total assets minus total liabilities. Net worth is an important determinant of the value of a company

4. Terms • Par value – a dollar value shown on a share of stock, which is an arbitrarily assigned amount that is used for bookkeeping purposes • Reserve-- funds set aside for emergencies or other future needs • Retained earnings – profits that are put aside to run a business • Revenue– the total amount of money earned by a business; income • Shareholder’s equity – The value of a business to its owners (shareholders) after all the commitments have been met. • Total Revenue -- amount of money a business brought in during the time period covered by the income statement.  • Treasury Stock -- Stock reacquired by a corporation to be retired or resold to the public. Treasury stock is issued but not outstanding, and is not taken into consideration when calculating earnings per share or dividends, or for voting purposes.