Financial Management: Definitions Essay

Define the following terms using your text or other resources. Cite all resources consistent with APA guidelines. Term Definition Resource you used Time value of money Explaind how a dollar received today, other things being  the same, is worth more than a dollar received a year from now. Efficient market efficient market is a market in which all the available information is fully incorporated into securities prices, and the returns investors will earn on their investments cannot be predicted. Primary versus secondary market A primary market is a market in  which new, as opposed to previously issued, securities are bought and sold for the first time. The secondary market is where all subsequent trading of previously issued securities takes place. Risk-return tradeoff investment opportunities  that have different risks and different expected rates of return that reflect those risks. Agency (principal and agent problems) The conflict of interest between the firm’s managers and its stockholders is called a principal-agent problem, or agency problem, in which the firm’s common stockholders, the owners of the firm, are the principals in the relationship, and the managers act as â€Å"agents† to these owners. Market information and security prices and information asymmetry. Through Market information you can know the prices of the different commodities in the market, the supply and the demand situation. Agile and lean principles  to be responsive to changing needs. Previous teachings Return on investment A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. Cash flow and a source of value Cash flow is a revenue or expense stream that changes a cash account over a given period. A source of value is a source of worth, merit or importaince Project management The planning and organization of an organization’s resources in order to move a specific task, event or duty toward completion. Outsourcing and offshoring Offshoring means getting work done in a different country. Outsourcing refers to contracting work out to an external organization. http://www.diffen.com/difference/Offshoring_vs_Outsourcing Inventory turnover A ratio showing how many times a company’s inventory is sold and replaced over a period Investopedia Just-in-time inventory (JIT) Just in time (JIT) inventory is a management system in which materials or products are produced or acquired only as demand requires http://smallbusiness.chron.com/just-time-inventory-definition-23475.html Vender managed inventory (VMI) A means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributor’s inventory levels. http://www.vendormanagedinventory.com/definition.php Forecasting and demand management Demand management and forecasting is recognizing all demand for goods and services to support the marketplace. Demand is prioritized when supply is lacking. http://www.apics.org/industry-content-research/publications/ombok/apics-ombok-framework-table-of-contents/apics-ombok-framework-5.4