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PORTFOLIO AUTHOR: LUCÍA RUIZ LÓPEZ 11TH ACCOUNTING KEY #10

UNIT 2


Index Pictionary............................................................................................................ 2 Summary of topics............................................................................................ 10 1. Advertising .............................................................................................. 10 How Companies Advertise?....................................................................... 10 Advertising Spending and Sales: ............................................................... 10 ................................................................................................................... 10 Potential Drawbacks of Advertising: .......................................................... 10 Word-of-Mouth Advertising: ....................................................................... 11 2. Banking .................................................................................................. 11 Commercial Banks: .................................................................................... 11 Investment Banks: ..................................................................................... 11 Private Banks: ............................................................................................ 11 Islamic Banks:............................................................................................ 11 3. Venture capital........................................................................................ 12 Business Plan: ........................................................................................... 12

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pictionary Word

Definition

Example

ADVERTISING Advertising Agencies

Companies that design advertising for clients.

Some companies decide to hire advertising agencies in order to have creative advertisement.

Advertising Campaign

The advertising of a particular product or service during a particular period of time.

You should use an effective advertising campaign to attract more potential customers.

Brief

The statement of objectives that a client works out with an advertising agency.

A brief should include all the important details you want your advertisement to have.

Target Customers

A defined set of customers whose needs a company plans to satisfy.

Our target customers are the ones in the A+ social class.

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Advertising Budget

The amount of money a company plans to spend in developing its advertising and buying media time.

Our advertising budget must be large due to all the expenses we have in that area.

Media Plan

The choice of where to advertise in order to reach the right people.

The company must follow the media plan to achieve the annual sales goals.

ComparativeParity Method

Choosing to spend the same amount on advertising as one’s competitors.

That company decided to use the comparativeparity method to increase the earnings.

Free Sample

A small amount of a product given to customers to encourage them to try it.

Giving free samples increase the interest of clients to buy a new product.

Word of Mouth Advertisement

A free advertising, when satisfied customers recommend products to their friends.

The word of mouth advertisement is the most effective way to promote the products.

Viral Marketing Trying to get consumers to forward an online marketing message to other people.

Viral marketing should be used in a moderate way, without annoying people for so much insistence.

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BANKING Deposit

Money placed The deposit for in a bank. $300 was successfully charged to our account.

Loan

A sum of In the beginning, money almost all the borrowed from companies make a bank. loans for finance the company.

Capital

The money You should count invested in a with a high business. capital if you are thinking in opening a new business.

Stocks Shares

Bonds

or Certificates representing a part-ownership of a company.

Investors’ job is to buy stocks for gaining a percentage of the monthly revenue.

Certificates of debt issued by governments or companies to raise money.

The bonds main purpose was to make the people pay for their debts.

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Merger

When one company combines with another one.

The merger process occurs when two or more companies decide to become one and increase the utility.

Takeover Bid

When one company offers to buy or acquire another one.

That company should consider takeover bid as an option since they are almost in bankrupt.

Stockbroking

Buying and selling stocks or shares for clients.

As an investor, I would like to participate in your company’s next stockbroking.

Portfolio

All the investments owned by an individual or organization.

Big companies divide their portfolios into their most important suppliers.

Returns

The profits The company made on must have the investments. 15% of returns as minimum.

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Bankrupt

Unable to pay debts or continue to do business.

Some companies decide to stop producing to avoid the definitive bankrupt.

Deregulation

The ending or Aforetime, many relaxing of fiscal problems legal occurred due to restrictions. the deregulations.

Conglomerate

A group of companies, operating in different fields, which have joined together.

They decide to conglomerate in order to unify criteria and establish new rules.

Interest

The price paid for borroeing money, payed to the lenders.

The interest that I paid for that loan was of the 5% monthly.

Credit Rating

Estimates of people’s ability to fulfil their financial commitments.

The bank policy specifies that they must do a credit rating before giving a loan.

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Default

Failure to If Karla defaults repay a loan. more than once, banks are definitively not borrowing money to her.

Collateralized

With property or another asset used as a guarantee of payment.

Cash Flow

The money Good companies generated by always have a an investment. high and continuous cash flow.

Write Off

Cancel a bad debt or a whorhless asset from an account.

Competitive Advantage

What an organization can do better than its competitors.

Poor people usually collateralized their loans in order to guarantee banks their payments.

The company decided to write off that client from the sales section.

VENTURE CAPITAL Businesses should find something innovative to increase their competitive advantage.

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Sustainable

Able to Sustainable continue over a earnings make period of time. succesful companies.

Sales Forecast The sales businesses expect to achieve in a particular period of time.

What the sales forecast predicts is that we are going to increase the sales this year.

Break-even Point

Where total costs equal total income from sales and the company makes neither a profit nor a loss.

At the beginning, many companies stay on the break-even point for approximately six months.

Revenue

The total income received by a business before any expenses are paid.

The three main sources of general revenue are personal income, sales and corporate income taxes.

Exit Strategy

An investor’s plan for getting their investment back and potentially realizing a profit.

If the business is not well accepted by the customers, I would use my exit strategy.

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Founders

The people who establish a company or other organization.

The main founders of the company are the ones in charge of deciding for what is the money for.

Staff

The people Without the staff, who are the company employed in an wouldn’t work. organization.

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Summary of topics 1. Advertising Advertising is the process of informing consumers about the existence and benefits of products and services, and attempts to persuade them to buy them.

How Companies Advertise? Some companies decide to use advertising agencies to produce the advertising for them. The only role of the company is give the agency a brief which has to include the principal objectives of the advertising campaign, the target customers and a budget. Then, the agency creates the advertisement and develops a media plan.

Advertising Spending and Sales: Frequently, companies spend a fixed percentage of current sales revenue to the advertising process. Some other ones, spend as much as their competitors.

Potential Drawbacks Advertising:

of

Advertising is essential for launching new consumer products. Traditional advertising (as giving free samples) is expensive, and it doesn’t always reach the target customers.

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Word-of-Mouth Advertising: The most effective form of advertising has always been word-of-mouth. It is basically people telling their friends and family about how good products and services the company offers. Nowadays, it has developed into viral marketing which is getting people to spread commercial messages, like a virus on the internet.

2. Banking The main four existing banks are:

Commercial Banks: They receive deposits from clients who had money, and make loans to people and small companies that need it.

Investment Banks: They work with big companies, give financial advices and increase their capital, with the only condition that they cannot take their money out in a certain period of time.

Private Banks: They provide wealthy clients with banking and investment services and use their money to buy and sell stocks. The hedge funds are private investment funds for wealthy investors.

Islamic Banks: They do not pay interest to depositors or charge interest to borrowers. But they invest in companies and share the profits or losses with their depositors.

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3. Venture capital It was once known as “risk capital� because it represents a high risk for the investor. Basically it is money provided by investors to startup firms and small businesses with long-term growth potential. It is an opportunity for the people that do not have access to capital markets.

Business Plan: Basically it is a guide that outlines goals and details for a business. Also, it should describe the course the company is going to take to achieve this objectives. A business plan example: Name: I-C Cupcakes Product Description: Basically they are cupcakes with ice cream filling. The available flavors for the mixture are: chocolate, peanut butter, vanilla and strawberry. And the filling is made of vanilla or chocolate ice cream. Market opportunities: I-C Cupcakes are the perfect way to celebrate any occasion, to compliment any cake, or just for the sweetness of everyday life. It will be accepted by the customer because it is an innovative idea with no competition in the market. Unique traits: I-C Cupcakes has home delivery and the customer decides whether she/he wants the cupcakes with the ice cream included or separated in order to prepare them later. Market leader: Sweeties Gourmet Cupcakes (Mini-Cupcakes). Target market: It will be a generalized market because cupcakes are eaten by mostly all the people in special occasions. Promotion and advertising: A promotion process will occur during the opening of the company because in that way we are going to be able to dispatch the orders rapidly. And the advertising will happen through the delivery of flyers in strategical places such as in companies that make birthday celebrations, baby showers and other social meetings. Additionally, the company will count with a Facebook page which will serve to receive orders and reply quotations. Physical location: I-C Cupcakes Central will be located at CayalĂĄ because it is a location which everyone knows, so that will allow the potential customers to visit us. 12


Portfolio Marketing Unit II