KIN 3804 MIDTERM – Flashcards
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debt, equity, retained earnings, government, gift
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what are the five forms of financing?
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science of fund management, includes application of concepts from accounting, economics, and statistics
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what is financial management?
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diverse objectives of owners, imbalance in competition, revenue sharing and other forms of cooperation
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how does financial management differ in the sport industry as compared to other industries?
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TARP Act
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what legislative actions currently being considered in Congress may affect the financial management of sport?
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assets, liabilities, stockholder's equity
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what are the three major sections of the balance sheet?
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income statement does not provide insight into long term survival with cash flow
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what is the primary difference between an income statement and a statement of cash flows?
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key information about the condition and performance of a company
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what is the purpose of computing financial ratios?
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how a company chooses to finance its operation with debt versus equity
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what information do leverage ratios provide?
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allows comparisons of the market values of companies of all sizes
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why is the price-to-earnings ratio so widely used among investors?
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rate of return
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how does risk affect the financial management of sport organizations?
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the real risk free rate of interest plus multiple risk premiums
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describe the process of determining a nominal interest rate?
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MLB, NFL
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of mlb, the nba, and the nhl, which league has the most risk, which has the least?
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risk of time
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risk increases as the length os time funds are invested increases. this is known as the
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through a lottery
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according to list and gneezy, one of the best ways to raise money is
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the return to single use facilities
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the biggest difference in facilities today compared to 25-30 years ago is
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financial cost
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the biggest expense associated with developing, soliciting, and implementing sponsorships is
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the herd mentality
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the concept of when people see other people of influence giving to a cause it increases the likelihood of contributing known as
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an exchange of mutual benefits
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the most critical component of a sponsorship agreement is
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money markets, investments, financial management
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the three interrelated sectors of finance are
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level of risk, risk of time
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the two components of risk are
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one group or individual owns league and all teams
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single entity
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each individual franchise has its own ownership group, league-wide revenues collected and distributed to teams
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distributed club league models
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single owner/private investor, multiple owners/private investment syndicate, multiple owners/publicly traded corporation
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the three ownership examples
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ownership structure, entertainment complexes, and real estate development, a new media world, the real estate management issues within new sports facilities and luxury seating, league policies
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four major changes that affected sport finance
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a form of advertising in which a firm pays for exposure that supports the firms marketing objectives
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sponsorship
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the generation of revenue through the solicitation of money or pledges
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fundraising
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reports of the financial condition of a corporation under a set of generally accepted accounting principles
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financial statements
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more permanent asset that the business cannot convert to cash relatively easily
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fixed assets
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measures financial performance over a specific accounting period, profit and loss
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income statement
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basic statistics that can be calculated from the financial statements
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financial ratios
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evaluate current operations, compare performance with past performance, compare performance against other firms or industry standards, study the efficiency of operations
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why is ratio analysis important?
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average amount of time it takes a business to collect outstanding accounts receivable
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asset management ratios
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reflects the amount of profits earned on the investment in all assets of the firm
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profitability ratios
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variability of known financial returns associated with a given asset
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risk
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randomness with unknown probabilities
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uncertainty
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yes
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is one of the consequence of recession the recent labor disputes in nba, nfl, and nhl?
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the decrease in the value of money over time
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time value of money
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the current value of money, removing the effects of changes in price over time
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real value
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an increase in the price level of products that could be due to increased demand, which leads to an increase in prices, wages, and costs
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inflation
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a series of equal payments or receipts made at regular intervals
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annuity
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an annuity that has no scheduled ending
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perpetuity
