Categorizing Risk
Changes in supply and demand, competition, and new technologies
Economic
Identifying potential risk to assets and ways to handle those risks is known as what
Risk Management
An amount paid each year for insurance coverage
Premium
Maintaining a budget puts companies in _____ of their money. Without a budget, money often runs operations instead of the other way around.
Controlling
What is the Balance Sheet equation?
Assets = Liabilities + Owner’s Equity
Miscalculation of market size, competition, target market, or marketing strategies
Market
Businesses can take steps to do this for a risk. For instance, locking doors or installing a security alarm in a retail store can reduce risk. Likewise, storing valuable items in appropriate locations can help to minimize potential loss.
Reduce
An amount that represents part of the repair cost or medical cost that the insured person is responsible for
Deductible
Not knowing how much money is available can cause this. Following a budget and knowing precisely when money enters and exits an account can avoid this.
Reducing Stress
The balance sheet shows the amount of money a business has for immediate use—its working capital—What's the equation for Working Capital?
Current Assets – Current Liabilities = Working Capital
Use of credit, investments, and transactions
Financial
When it comes to covering potentially big losses, most businesses choose to do this to the the risk to an insurance company. Insurance companies agree to pay for part of the expense of the loss in exchange for purchasing coverage.
Transfer
A specific amount, often referred to as a co-pay, that an insurance carrier expects the insured person to pay
Co-Payment
Knowing exactly where money is going builds this. Companies that implement a budget make better decisions that align with company goals. Instead of questioning every purchase, a company can review the budget to see if money is available.
Building confidence
What is the formula for Net Profit or Net Loss?
Revenue – Expenses = Net Profit or Loss
Actions that have negative consequences, such as embezzlement and identity theft
Human
If possible, the most desirable choice is to do this when it comes to a potential risk altogether. For instance, if a business is worried that a promotional campaign may offend members of a target market, it should avoid running the campaign and instead design a new promotion that will be well received by all members of the target market.
Avoid
Details the terms and conditions of insurance coverage.
Insurance Policy
Types of Goals that should be implemented to make your budget.
SMART
What is the formula for Net Profit Ratio?
Net Income / Net Sales = Net Profit Ratio
While protecting assets is important in risk management, organizations must also speculate business risks by conducting this
Risk Assessment
Businesses can choose to take responsibility and do this for the risk by paying for any losses. This is often called self-insurance. Some organizations choose to self-insure if they have adequate capital to cover potential losses and doing so is more cost effective than filing an insurance claim.
Retain
To return the insured to the condition he or she was before the loss.
Indemnity
Name the three types of Credit for business (you'll need to be able to define them on the assessment).
Consumer, Business and Trade
What is the formular for Operating Ratio?
Operating Expenses / Sales = Operating Ratio