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Alayon Group

3.

All firms have a relatively small market share.

Arbitrage - Arbitrage is a trading strategy which involves the


purchase and resale of an asset to exploit short-term price
differences between markets in order to make a profit.
Traders who engage in arbitrage are known as "arbitrageurs".

4.

Buyers have complete information about the


product being sold and the prices charged by each
firm.

5.

The industry is characterized by freedom of entry


and exit.

Two types:
1. Pure risk free
2. Risk considered speculative because it is based
on presumption about future events that may not
occur.
Engels Law - An economic theory introduced in 1857 by Ernst
Engel, a German statistician, stating that the percentage of
income allocated for food purchases decreases as income
rises. As a household's income increases, the percentage of
income spent on food decreases while the proportion spent
on other goods
GNP Gross National Product - Gross national product (GNP)
is a broad measure of a nation's total economic activity. GNP
is the value of all finished goods and services produced in a
country in one year by its nationals.

Monopoly - A monopoly is a market structure in which there


is only one producer/seller for a product. In other words, the
single business is the industry.
Types of Monopoly:
1.

Natural Monopoly - A natural monopoly is a type of


monopoly that exists as a result of the high fixed
costs or start up costs of operating a business in a
specific industry. Additionally, natural monopolies
can arise in industries that require unique raw
materials, technology or other similar factors to
operate.

2.

Legal Monopoly - A company that is operating as a


monopoly under a government mandate. A legal
monopoly offers a specific product or service at a
regulated price and can either be independently run
and government regulated, or government run and
regulated.

3.

Franchised Monopoly - Monopoly status given by


the government to a company. A franchised
monopoly is sheltered from competition by virtue of
an exclusive license or patent granted to it by the
government.

The formula for GNP is:


Gross National Product =
Consumption + Government Expenditures + Investments +
Exports + Foreign Production by U.S. Companies Domestic
Production by Foreign Companies
Investment - An investment is an asset or item that is
purchased with the hope that it will generate income or will
appreciate over time.
Mutual Funds - A mutual fund is an entity that pools the
money of many investors and then invests them in different
securities. Investments may be in shares, debt securities,
money market securities or a combination of these. On behalf
of the investors / unit-holders, these securities are
professionally managed by a fund manager, working
effectively to generate a return from investments.
Break-even Point - The break-even point (BEP) in economics,
business, and specifically cost accounting, is the point at
which total cost and total revenue are equal: there is no net
loss or gain, and one has "broken even.
Perfect Competition - Perfect competition is a theoretical
market structure. It is primarily used as a benchmark against
which other, real-life market structures are compared. The
industry that most closely resembles perfect competition in
real life is agriculture.
5 Criteria of a Perfect Competition:
1.

All firms sell an identical product.

2.

All firms are price takers - they cannot control the


market price of their product.

Law of Diminishing Returns - A concept in economics that if


one factor of production (number of workers, for example) is
increased while other factors (machines and workspace, for
example) are held constant, the output per unit of the
variable factor will eventually diminish.
Depletion - The lessening of the value of an asset due to the
decrease in the quantity available (referring to the natural
resources, coal, etc.) Unlike depreciation and amortization,
which mainly describe the deduction of expenses due to the
aging of equipment and property, depletion is the actual
physical depletion of natural resources by companies.

Cuevas Group
Partnership - an arrangement in which two or more
individuals share the profits and liabilities of a business
venture. Various arrangements are possible: all partners
might share liabilities and profits equally, or some partners
may have limited liability.
3 Main Categories of Partnership
General Partnership - all parties share the legal and financial
liability of the partnership equally. In other words, the
individuals are personally responsible for the debts the
partnership takes on.
Limited Liability Partnership - This arrangement limits
partners' personal liability, so that, for example, if one
partner is sued for malpractice, other partners' individual
assets are not at risk as a result.
Limited Partnership - are a hybrid of general partnerships
and limited liability partnerships. At least one partner must
be a general partner, with full personal liability for the
partnership's debts, while at least one partner's liability must
be limited to the amount she's invested in the partnership.
Payback Period - the length of time required to recover the
cost of an investment. The payback period of a given
investment or project is an important determinant of
whether to undertake the position or project, as longer
payback periods are typically not desirable for investment
positions.
Asset - It is a resource with economic value that an individual,
corporation or country owns or controls with the expectation
that it will provide future benefit. It can be also thought of as
something that in the future can generate cash flow, reduce
expenses, improve sales, regardless of whether it is a
companys manufacturing equipment or a patent on a
particular technology.
Assets are recorded on companies balance sheet based on
the concept of book value, which represents the first/original
cost of the asset, adjusted for any improvements or aging.
Assets coexist with liabilities.
Liquidity - It is describe as the degree to which an asset or
security can be quickly bought or sold in the market without
affecting the assets price.
The degree to which an asset or security that CAN
NOT be quickly sold in the market is called Illiquid.
Liquid Asset gold.
Illiquid Asset collectors item, equipment, facilities and etc.

Category:
It can be categorized into short-term or current
assets, fixed assets, financial investments and
intangible assets.
Current Assets it includes cash, inventory (raw materials or
goods to be sold), accounts receivable (it has made a sale but
has yet to collect the money from the purchaser) and etc.
Fixed assets it includes plants, equipment, buildings and
others.
Financial investments it includes stocks, corporate bonds,
and other hybrid securities.
Intangible assets no physical presence includes patents,
trademarks, copyrights etc.
Sunk Cost - A sunk cost is a cost that has already been
incurred and cannot be recovered. Sunk costs (also known as
retrospective costs) are sometimes contrasted
with prospective costs, which are future costs that may be
incurred or changed if an action is taken.
Capital Recovery - When you make an investment in an asset
or a company, you get a negative return on your investment
until you recoup your initial investment. The return of that
initial investment is called capital recovery. Capital recovery
also occurs when a business recoups the money it invested in
machinery and equipment by selling or disposing of them.
Income Tax - Are assessed as a function of gross revenues
minus allowable deductions. They are levied by the federal,
most state, and occasionally municipal governments.An
income tax is a tax that governments impose on financial
income generated by all entities within their jurisdiction.
Property Tax - Are assessed as a function of the value of
property owned such as land, buildings, equipment, and so
on, and the applicable tax rates.
Joint Liability - An obligation, including an obligation to repay
a debt between two or more parties. A joint liability allows
parties to share the risks associated with taking on additional
debt, and to protect themselves in the event of legal litigation
and lawsuits.
Quant Fund - An investment fund that
selects securities based on quantitative analysis. In a quant
fund, the managers build computer-based models to
determine whether an investment is attractive. In a pure
"quant shop" the final decision to buy or sell is made by the
model; however, there is a middle ground where the fund
manager will use human judgment in addition to a
quantitative model.

Matias Group
Absolute Poverty - Poverty defined with respect to an absolute material
standard of living. Someone is absolutely poor if their income does not
allow them to consume enough to purchase a minimum bundle of
consumer goods and services (including shelter, food, and clothing). An
alternative approach is to measure relative poverty.
Capitalism - An economic system in which privately-owned companies
and businesses undertake most economic activity (with the goal of
generating private profit), and most work is performed by employed
workers who are paid wages or salaries.
Cost of Job Loss - When a worker is laid off or fired, they experience a
significant out-of-pocket cost. That cost of job loss depends on how
much they were earning in their job, how long it takes them to find a
new job, the level of unemployment benefits they are entitled to, and
the level of their pay in the new job. The higher the cost of job loss, the
more employers will be able to threaten and discipline their workers.
Cutting unemployment insurance has been one key neoliberal strategy
for increasing the cost of job loss.
Deficit - When a government, business, or household spends more in a
given period of time than they generate in income, they incur a deficit. A
deficit must be financed with new borrowing, or by running down
previous savings.
Depression - A depression is a very deep, long, and painful recession, in
which unemployment rises to very high levels, and economic output
does not bounce back.
Gross Domestic Product - The value of all the goods and services
produced for money in an economy, evaluated at their market prices.
Excludes the value of unpaid work (such as caring reproductive labor
performed in the home). GDP is calculated by adding up the value-added
at each stage of production.
Hoarding - A situation in which financial investors, companies, or
individual consumers choose to hold hoards of cash or other liquid
assets, rather than spending and re-spending that money. Hoarding
often results from intense fears about future economic and financial
turbulence yet ironically hoarding can create the very recession which
hoarders fear!
Mortgage - A mortgage is a special kind of credit, usually longer-term in
duration, used to finance the construction or purchase of property or a
long-lasting structure (such as a home or building).
Shares - Financial assets which represent the ownership of a small
proportion of the total equity (or net wealth) of a corporation. Shares
can be bought and sold on a stock market.
Stock Market - A place where shares of joint stock corporations are
bought and sold. Most modern stock markets no longer have a physical
presence, but rather consist of connected computer networks.
Tariff - A tariff is a tax imposed on the purchase of imports. It is usually
imposed in order to stimulate more domestic production of the product
in question (instead of meeting domestic demand through imports).
Unions - Organizations of working people which aim to bargain
collectively with employers in order to enhance workers bargaining
power, raise wages, and regulate working conditions.

Alacapa Group
Propensity - ECONOMICS abounds with propensities to do
various things: consume, save, invest, import, and so on.
AVERAGE propensity total CONSUMPTION
divided by total INCOME. The ratio of
total consumption to total income.
MARGINAL propensity - is a metric that quantifies
induced consumption. It is an increase in
consumption caused by an addition to income
divided by that increase in income
Price discrimination - When a firm charges different
customers different PRICES for the same product.
Capital recovery - earning back of the initial funds put into an
investment.
Considerations

initial cost,

salvage value at the end of its useful life

any anticipated revenue stream

Liquidation - is the process by which a company (or part of a


company) is brought to an end, and the assets and property
of the company are redistributed.
Liquidity - Describes the degree to which an asset or security
can be quickly bought or sold in the market without affecting
the assets price.
Economic Service Life - Number of years at which the Annual
Worth of costs is a minimum
Law of Diminishing Marginal Utility - It's a law of economics
stating that as a person increases consumption of a product
while keeping consumption of other products constant, there
is a decline in the marginal utility that person derives from
consuming each additional unit of that product.
Economic Equilibrium - A condition or state in which
economic forces are balanced. These economic variables
remain unchanged from their equilibrium values in the
absence of external influences.
Annual worth - equivalent uniform annual worth of all cash
inflows or outflows over estimated life
Market power - When one buyer or seller in a market has the
ability to exert significant influence over the quantity of
goods and SERVICES traded or the PRICE at which they are
sold.

Gobres Group
PASSIVE INCOME - earnings an individual derives from a
rental property, limited partnership or other enterprise in
which he or she is not materially involved.
TAXES - generally an involuntary fee levied on individuals or
corporations that is enforced by a government entity,
whether local, regional or national in order to finance
government activities.
ABSENTEEISM - is the habitual non-presence of an employee
at his or her job.
ABANDONMENT - an expression that describes the forfeiture
of property and the ensuing claim over that property by a
second party.
DEBIT CARD - payment card that deducts money directly from
a consumers checking account to pay for a purchase.
MAPLE BOND - bond denominated in Canadian dollars that is
sold in Canada by foreign financial institutions and
companies.
MONETARISM - set of views based on the belief that inflation
depends on how much money the government prints.
MONOPOLISTIC MARKET - is a theoretical construct in which
only one company may offer products and services to the
public.
REAL ESTATE - is property comprised of land and the
buildings on it as well as the natural resources of the land
including uncultivated flora and fauna, farmed crops and
livestock, water and minerals.
PARTNERSHIP - is an arrangement in which two or more
individuals share the profits and liabilities of a business
venture.

Merin Group
1.

DEPRECIATION

process of allocating the depreciable amount of an


asset over its useful life in a systematic and rational
manner.
2. RESIDUAL VALUE

the amount that an entity would currently obtain


from disposal of the asset.
3. USEFUL LIFE

period over which an asset is expected to be


available for use.
4. FIXED COST

is a cost that does not change with an increase or


decrease in the number of goods or services
produced or sold.

is an expense that has to be paid by a company,


independent of any business activity.

E.g.: House Rent Fees, Insurance, Interest expense,


Property Taxes
5. VARIABLE COST

is a corporate expense that varies with production


output.

Variable costs are those costs that vary depending


on a company's production volume; they rise as
production increases and fall as production
decreases.

E.g. Goods, Gasoline Price


6. INCREMENTAL COST

also referred to as marginal cost, is the


encompassing change a company experiences
within its balance sheet or income statement due to
the production and sale of one additional unit of
production.

E.g. Services
7. SUNK COST

is a cost that has already been incurred and thus


cannot be recovered.

A sunk cost differs from future costs that a business


may face, such as decisions about inventory
purchase costs or product pricing.

Sunk costs (past costs) are excluded from future


business decisions, because the cost will be the
same regardless of the outcome of a decision.

E.g.: Cost of Machinery, Lease Cost of Factory


8. INITIAL INVESTMENT

is a subcategory of capital costs.

is simply the purchase price.


9. REGISTERED BONDS

the name of the owner of this bond is recorded on


the record books of the corporation and interest
payments are sent to the owner periodically
without any action on his part.
10. COUPON BONDS

have coupon attached to the bond for each interest


payment that will come due during the life of the
bond.

the owner of the bond can collect the interest due


by surrendering the coupon to the offices of the
corporation or at specified banks.

Bayot Group
Sunk Cost - A sunk cost is a cost that was incurred in the past
and cannot be undone. Since most transactions cannot be
undone, most amounts spent in the past can be described as
sunk. In other words, a past or sunk cost will be there
regardless of what you decide to do today or in the future.
Historical Cost - Historical cost is a term used instead of the
term cost. Cost and historical cost usually mean the original
cost at the time of a transaction. The term historical cost
helps to distinguish an asset's original cost from its
replacement cost, current cost, or inflation-adjusted cost.
Dividends - Paid to shareholders after expenses and taxes
have been paid. When a corporation earns a profit or surplus,
it can re-invest it in the business (called retained earnings),
and pay a fraction of the profit as a dividend to shareholders.
Liability - A liability is a company's financial debt or
obligations that arise during the course of its business
operations. Liabilities are settled over time through the
transfer of economic benefits including money, goods or
services.
Appraised Value - The estimated market value of an asset
Capital Recovery - Charging periodically to operations
amounts that will ultimately equal the amount of capital
expended.
Deferred Interest - A loan with a payment structure that
allows for a scheduled payment to be made where it is less
than the interest charge on the loan at the time the
scheduled payment is made.
Equity - Equity is the difference between the value of the
assets and the cost of the liabilities of something owned.
Inflation - is the increase in the amount of money necessary
to purchase the same amount of a product or service over
time. Consequently, inflation reflects a reduction in
the purchasing power per unit of money.
Break-even Analysis
Break-even is the condition for which revenues and costs are
equal.
The level of production where the total income is equal to the
total expenses is known as the break-even point. It is
necessary to determine the break-even point in order to
estimate the amount of profit or loss.

Pampola Group
Cash Flow - The flow of money into and out of a company,
project, or activity. Revenues are cash inflows and carry a
positive (+) sign; expenses are outflows and carry a negative
() sign.
Cash Flow Diagram is a picture of a financial problem that
shows all cash inflows and outflows plotted along a horizontal
time line.
Amortization - The reduction in value over time of intangible
assets such as patents, copyrights, leasehold improvements,
franchise rights, or other nonphysical assets.
Depreciation - Reducing fixed assets such as equipment or
buildings in value over time. The reduction in value is entered
as an expense in the cost category of the Income Statement.
Salvage Value - The estimated value of the asset when it is no
longer used by the organization. Approximates the future
market value of the asset. It is the estimated resale value of
an asset at the end of its useful life.
Costs - Expenses for materials, labor services, overhead, and
other expenses. Costs are deductions from the Income
Statement; they are money flowing from the organization.
Straight-line Method - A depreciation method that reduces
the asset value at a constant rate over its life. It is easiest
to use a standard useful life for each class of assets. Divide
the estimated useful life (in years) into 1 to arrive at
the straight-line depreciation rate. Multiply
the depreciation rate by the asset cost (less salvage value).
Sum-of-Years-Digits - A mathematical depreciation method
that creates high depreciation expense in the early years of
the asset's life and low depreciation expense in the later
years. The sum of the years' digits method will result in
greater depreciation in the earlier years of an asset's useful
life and less in the later years
Compound Interests - Interest that is computed on the
original unpaid debt and the unpaid interest
Annuity - An annuity is a series of equal payments made at
equal intervals of time. Financial activities like installment
payments, monthly rentals, life-insurance premium, monthly
retirement benefits, are familiar examples of annuity
Capitalized Cost