1

1st degree liquidity

Liquidity 1st degree describes the liquid funds in relation to short-term liabilities of a company. First degree liquidity e.g. B. in the amount of 25% shows that 25% of the short-term liabilities can be settled with cash funds. 1st degree liquidity = (cash and cash equivalents / short-term liabilities) x 100%

2

2nd degree liquidity

Second-degree liquidity describes the sum of receivables and liquid funds in relation to current liabilities. Second-degree liquidity, e.g. B. in the amount of 75% shows that the receivables and cash and cash equivalents can cover 75% of the short-term liabilities. 2nd degree liquidity = (receivable + cash) / current liabilities) x 100%

3

3rd degree liquidity

If the third-degree liquidity is below 100%, short-term liabilities cannot be covered from current sales. As a result, loans have to be taken out or fixed assets have to be sold. 3rd degree liquidity = (current assets / short-term liabilities) x 100%

A

ABC analysis

In terms of its content, the ABC analysis is a value frequency analysis that leads to particularly interesting results when it is applied to populations with a very wide range and a very heterogeneous composition. By creating classes (A, B, C class), the area under investigation is structured in terms of value in such a way that the use of funds can be concentrated on the areas that have the greatest economic importance for the institution concerned (company, etc.). As an instrument of operational controlling, the ABC analysis supports the implementation of the economic principle in economic behavior, according to which the highest possible result (= output) should be achieved with the given use of resources (= input).

ABC analysis

Accounting principle of reverse authoritativeness

The principle of reverse authoritativeness determines that the valuation of assets determined in the tax balance sheet according to tax law requirements is also binding for the valuation in the commercial balance sheet. This applies, for example, to regulations on special depreciation that is possible under tax law: If a special depreciation that is permissible under tax law can be made for assets that goes beyond the depreciation that is permissible under commercial law, then the value shown in the tax balance sheet can also be transferred to the commercial balance sheet (additional depreciation option). Such a principle of reversed authority is not formulated in US GAAP.

Accounting principle of reverse authoritativeness

accounting principles

The principles of proper accounting (GoB) - within the meaning of §§ 238 and 243 HGB (Germany) and other legal provisions - are the legal norms that companies and other persons responsible for accounting require for a proper design of accounting in the context of bookkeeping and the preparation of annual financial statements oblige. In detail, the GoB concern both principles of documentation and principles of accountability. The principles of documentation include, above all, the principle of clarity and clarity, the principle of "no posting without receipt", the principle of correctness and freedom from arbitrariness, the principle of completeness and verifiability of the records of business transactions within the financial year.

accounting principles

Acquisition potential

If the provider increases its price, the customer will react with a certain tolerance. The customer migrates only slightly. The same happens when the price goes down. Customers stay with their regular providers and do not migrate directly to the competition. One speaks here of the acquisition potential of a provider.

Acquisition potential

amount of money

The money stock in an economy means monetary aggregates (summaries) defined as money stock M1, M2 and M3. Money supply M1 Cash in circulation and deposits due on demand (= sight deposits) in the area of non-banks in the euro zone Money supply M2 Money supply M1, plus other short-term investments (= deposits with an agreed term of up to two years and deposits with an agreed notice period of up to three Months) Money supply M3 Money supply M2, plus all marketable instruments such as repo transactions, money market fund shares, debt securities up to two years. The reference value of the monetary policy of the European Central Bank (ECB) is the money supply M3, which summarizes all money supplies.

annuity

The annuity is the annual payment that a debtor has to make to a creditor on the basis of a loan agreement as repayment amount. The annuity is to be determined as follows: Annuity a = 1/RBF RBF= pension present value factor. The pension present value factor can be read in interest tables (criterion 1: interest; criterion 2: number of years or months)

annuity

assets

Assets are the assets and prepaid expenses shown in the balance sheet of a company, which are subject to capitalization in accordance with the applicable commercial and tax law regulations. An asset can be capitalized if it belongs to the economic property of the company, embodies an economic value that can be independently assessed and independently marketed, e.g. sold. Depending on the probable length of time they have been with the company and their function in the company process, the assets are divided into fixed assets and current assets.

assets

In monetary terms, the assets of a company represent the active inventory of assets on the balance sheet date. It is divided into fixed assets and current assets. The assets are shown on the ASSETS page of the balance sheet and are to be valued according to the lower of cost or market principle. In comparison to capital, assets provide information about the use of funds.

attribution

Appreciation means an increase in the value of fixed assets. In terms of content, write-ups are corrections to earlier write-downs. They must therefore be offset against the cumulative depreciation of previous years in order to prevent the write-ups from exceeding the acquisition or production costs. The write-up is closely related to the write-up requirement.

B

balance sheet

In terms of commercial and tax law, a balance sheet is a comparison of the assets (= use of funds) and the capital (= origin of funds) of a company in the form of accounts on a key date. Asset items are shown on the left side of the balance sheet. They form the assets or assets of the company and are grouped according to fixed assets and current assets. The positions of the source of funds, ie the capital, are shown on the right-hand side of the balance sheet, they are referred to as the liabilities or the liabilities and are differentiated according to equity and outside capital. The basis for preparing the balance sheet is the inventory. The balance sheet serves to show assets, capital, success and liquidity and is important when the company is founded or taken over,

balance sheet

balance sheet analysis

Balance sheet analysis is a systematic preparation and detailed examination of the data in a balance sheet that has been completed as part of the annual financial statements. The aim of balance sheet analysis is to use the balance sheet data and an associated comparison of periods to draw up statements on the asset, financial, earnings and liquidity situation of a company and to determine corresponding balance sheet key figures. The balance sheet analysis not only includes the balance sheet itself, but the entire annual financial statement (balance sheet, profit and loss account, appendix and, if applicable, the management report) as well as other documents of the annual report. The balance sheet analysis can be carried out by external groups (for example: credit institutions, shareholders, competitors),

balance sheet analysis

balance sheet extension

As diverse as the individual business transactions may be in the course of a financial year, they can always be traced back to one of the four basic types of balance sheet changes mentioned below: A pure asset exchange is caused. Example: The purchase of a business premises and machines in the "capital use" phase of the sales process only causes a restructuring of the asset items, without any effect on the asset (= balance sheet) total and without any effect on the capital side. A pure passive swap is caused. Example: Such a case can occur when outstanding short-term liabilities are converted in whole or in part into a long-term loan - in concession by the creditor concerned. An active-passive increase as a so-called Balance sheet extension caused. Example: Such a situation can occur, for example, in the capital utilization phase: the purchase of raw materials on target increased both the stock of assets and - in the same amount - also the capital (= PASSIVE) side. Total assets consequently increased on both sides of the scheme. An asset-liability reduction is caused as a so-called balance sheet contraction. Example: This situation always occurs when liabilities are repaid or profits are withdrawn. Total assets consequently increased on both sides of the scheme. An asset-liability reduction is caused as a so-called balance sheet contraction. Example: This situation always occurs when liabilities are repaid or profits are withdrawn. Total assets consequently increased on both sides of the scheme. An asset-liability reduction is caused as a so-called balance sheet contraction. Example: This situation always occurs when liabilities are repaid or profits are withdrawn.

balance sheet extension

Balance sheet tax balance sheet

The balance sheet prepared according to the applicable tax regulations is called the tax balance sheet. The aim of preparing a tax balance sheet is to ensure that the taxable profit is determined in such a way that a largely 'fair' calculation of taxes on income and earnings (profit taxes) is possible. In accordance with the principle of authoritativeness, the values for the assets and liabilities of the company shown in the commercial balance sheet are binding for the tax balance sheet. The tax balance sheet may only deviate from the commercial balance sheet if tax regulations prescribe a different value approach for the valuation of assets. If possible options are used under tax law, e.g. in the case of depreciation or write-ups,

Balance sheet tax balance sheet

bank controlling

The task and concern of bank controlling is to provide the decision-makers in the banking company with unfalsified information about the expenditure/cost side and the income/revenue side of the respective banking transactions at all times. The quality of this information must be such that it allows targeted management of banking transactions based on criteria such as profitability, liquidity and security (risk reduction). Proven instruments of bank controlling are the individual transaction calculation, the market interest method, the return-on-investment analysis, the profit requirement analysis, the portfolio analysis, the strength-weakness analysis, budgeting, the risk analysis and the scenario technique.

bank controlling

Basel II

In June 1999, the Basel Committee on Banking Supervision, which includes representatives of the central banks of the most important (currently 12) industrialized countries, published a consultation paper proposing a new capital regime for banks that would replace the agreement that had been in force since 1988 and is now accepted by over 130 countries. to replace Basel I". The regulations according to "Basel I" state that the banks are obliged to make a so-called equity deposit of a uniform 8% when granting loans. For example, if a company takes out a loan of EUR 120,000.00, the bank concerned is obliged to make an equity deposit of EUR 9,600.00. According to the new regulations in "Basel II", the percentage of capital backing should now go up, but can also be differentiated downwards. This means: If a bank issues a loan to a company, for example again in the amount of EUR 120,000.00, knowing that the probability of a 100% loan repayment for this company is not fully given, then the bank must have a higher equity backing, for example 11%. The previous EUR 9,600.00 (= 8%) would then become EUR 13,200.00 (= 11%) equity backing. On the other hand, the percentage of equity backing can also be well below 8%, namely when the borrower - according to a rating process - receives a very good credit rating. The previous equity capital agreement (Basel I) is now to be further developed by Basel II in the following directions: - Extension of the scope of application of the equity capital agreement to all relevant banking and financial services institutions. - Differentiation of the risk rates depending on the creditworthiness of the borrower within five risk classes (0%, 20%, 50%, 100%, 150%). This means that if a bank has to take fewer risks when granting a loan, it also needs to deposit less equity. - Equality of credit ratings by a) internal bank ratings and b) by external rating agencies. According to the current situation, "Basel II" is expected to come into force from 2006, but banks and savings banks are already using the principles of the new equity directive to check customers' creditworthiness. - Differentiation of the risk rates depending on the creditworthiness of the borrower within five risk classes (0%, 20%, 50%, 100%, 150%). This means that if a bank has to take fewer risks when granting a loan, it also needs to deposit less equity. - Equality of credit ratings by a) internal bank ratings and b) by external rating agencies. According to the current situation, "Basel II" is expected to come into force from 2006, but banks and savings banks are already using the principles of the new equity directive to check customers' creditworthiness. - Differentiation of the risk rates depending on the creditworthiness of the borrower within five risk classes (0%, 20%, 50%, 100%, 150%). This means that if a bank has to take fewer risks when granting a loan, it also needs to deposit less equity. - Equality of credit ratings by a) internal bank ratings and b) by external rating agencies. According to the current situation, "Basel II" is expected to come into force from 2006, but banks and savings banks are already using the principles of the new equity directive to check customers' creditworthiness. - Equality of credit ratings by a) internal bank ratings and b) by external rating agencies. According to the current situation, "Basel II" is expected to come into force from 2006, but banks and savings banks are already using the principles of the new equity directive to check customers' creditworthiness. - Equality of credit ratings by a) internal bank ratings and b) by external rating agencies. According to the current situation, "Basel II" is expected to come into force from 2006, but banks and savings banks are already using the principles of the new equity directive to check customers' creditworthiness.

Basel II

black box

A black box is a method of modeling in the context of macro-analysis of real systems. This approach abstracts from the inner workings of the system - either because it is not amenable to direct investigation or because knowledge of it is not needed at the stage of investigation under consideration - and attention is paid only to the goal of determining how the system will exit (with defined output and status variables) reacts when the values of one or more input variables are varied at the input - with given initial statuses. Cybernetic systems theory sees it as its task to mathematically describe the relationship between changes in input variables and changes in output variables.

black box

bond

A bond is a long-term loan that is raised by issuing bonds on the capital market.

bond

A bond is a long-term loan that is raised by issuing bonds on the capital market.

borrowed capital

From the point of view of the source of the funds, the outside capital shown on the liabilities side of the balance sheet represents the entirety of the funds that were made available to the company by external investors (= creditors) for a limited period of time. After the deadline, the resulting debts must be settled, either by repayment with interest (in the case of loans taken out), by paying invoices (for supplier credit and the like) or by paying other claims (e.g. pension payments from obligations of the company pension scheme). According to its content, a distinction is made between outside capital: Provisions (for liabilities to be settled, the amount and/or timing of payment of which is still uncertain) and liabilities (as liabilities, which are fixed in terms of amount and date). The borrowed capital only gives rise to a claim for repayment (usually with interest), but no claim to profit-sharing or co-determination in management.

bull market

A bull market is understood to mean (in contrast to a bear market) a longer period of rising share prices on the stock exchange (symbol: bull).

business administration

Business administration is understood to mean the planned management of companies/companies in market-based performance and price competition, with the aim of bringing the goods produced to cover third-party requirements to sales on the sales markets and making a profit in the process. Business administration (BWL) is the branch of economics that deals with uncovering and describing laws and relationships in the microeconomic economic actions of companies or companies - as will-controlled human behavior - and for deriving decisions for the practical organization of business administration processed by companies. From this determination of the content and the subject of business administration should become visible,

business administration

business process

The corporate process is the overall process of the economic trade of companies. From a balance sheet point of view: The central business management categories that relate to the entire business process are income - money as an output variable of the business process, expense - money as an input variable of the business process, success - as the balance between income and expenditure, and also profitability - as Relation of income to expenses. Anders: A company's success is the sequence from purchasing to production to sales. In a different way: The management can be viewed as a process: analysis phase > prognosis phase > goal formation (planning) phase > strategy formation phase > operative instrumental deployment phase > control phase > correction phase.

C

Capital (Economics)

Capital is the production factor that includes all the goods that go into the production process and are the result of previous production processes. In contrast to the production factors labor and land, the production factor capital is a "derived", derivative factor. However, capital is only a factor of production as material or real capital, not as money capital, because you cannot create goods to satisfy needs with banknotes alone. However, monetary capital is a necessary condition for acquiring buildings, machinery, equipment, materials and other goods needed to carry out a production process. The creation of new real capital requires that there is a willingness not to consume the entire income, but to save (= accumulate) part of it and make it available for investments. From this fact, important economic connections are made between income, the replacement of used real capital (replacement investments, realized through amortization) and investment of new real capital (net investments) and other variables (cf. origin, use and distribution of the gross national product).

capital turnover

The capital turnover (KU) indicates how often the invested capital K turns over in a certain period (e.g. fiscal year) via the turnover U: Capital turnover KU=U/K

cash flow

According to its content, the cash flow (literally: 'cash flow') is the financial surplus of an accounting period and is therefore an important indicator for assessing the profitability and self-financing power of a company. The key figure 'net cash flow' is primarily used to determine the possible scope for raising outside capital or for internal financing. The basis of this procedure is the determination of the so-called dynamic debt ratio or the theoretical repayment period.

cash flow

cash flow statement

Cash flow statements are a tool for depicting cash flows in companies (and in other institutions). As a rule, the change in cash and cash equivalents over the course of a business or budget year is examined according to three areas - ongoing business activity, - investment activity and - financing activity. The aim and concern of such a cash flow statement is to determine the causes of the change, especially in liquid funds, according to the causative factors, both qualitatively and quantitatively. As a so-called cash flow statement, the cash flow statement forms another important part of annual financial statements in accordance with internationally applied accounting regulations such as US-GAAP and IAS, alongside the balance sheet and the profit and loss account.

cash value

Present value is the discounted value of a capital at the present time t = 0. The general financial relationship is: Value to be discounted (K) * (1+i) to the power of -t. i=interest rate t=relevant period from which to discount. In business practice, the determination of the present value is of particular importance when evaluating pension provisions, pension obligations from the acquisition of assets on an annuity basis and non-interest-bearing receivables.

cash value

change

A bill of exchange is a document in which the issuer (= creditor) requests a debtor (= drawee) to pay a certain amount of money to a certain person (= bill of exchange taker) or their order. The bill of exchange is therefore a specific request for payment (= draft). If it is accepted by the drawee by signing, it is referred to as an acceptance. The bill of exchange plays a function-fulfilling role in the discount credit - for this form of financing.

chart of accounts

Charts of accounts are classification schemes for the uniform structuring of accounts in bookkeeping. Through the publication and application of - mostly industry-related - charts of accounts, decisive prerequisites for the proper auditing of the annual financial statements, the implementation of period and company comparisons and the creation of accounting software were created. Charts of accounts are usually based on the decimal system (account class 0 to account class 9). Each account class is divided into account groups, which in turn are divided into account types.

Cob web theorem

Alternatively: The cash flow is an economic parameter. As a result, the so-called cash flow statement, also known as the cash flow statement, provides the opportunity to create transparency about the cash flow of a company, to carry out a long-term company assessment and to draw a comparison within an industry. Cash flow analysis has a firm place in stock valuations as well as in bank credit assessments.

Cob web theorem

commercial register

The commercial register is an official directory of commercial companies. In Germany, this directory is kept by the register court of the competent district court. The commercial register is intended to provide interested insight into the legal and e.g. T. also give economic circumstances of a company.

commercial register

The register contains all important information about the existing registered companies. According to the law, all trading, production and other commercial operations are subject to registration. Companies entered in the commercial register are subject to the obligation to keep accounts. With the entry, the name of the company (the company) is protected. Details can be found in the HGB/Obligationengesetz.

company size

The size of the company is a criterion for the classification of companies according to the extent of their economic dimension. Since there is no uniform measure for determining the size of the company, companies are divided into small, medium-sized and large companies according to the criteria of turnover, number of employees and total assets (assets or capital). Other criteria for evaluating the size of the company are market position or output volume (eg which company is the world's largest manufacturer of cars).

company size

company valuation

Company valuation is the process of determining a value for a company as a whole. The main reasons for a company valuation are the purchase/sale of the company (change of ownership), merger of companies (merging of previously independent companies into a new company with redistribution of influence rights), determination of inheritance or gift tax, etc. According to the type of determination The following methods can be distinguished for the company value: Determination of the substance value of the company (based on the existing assets, either by determining a reproduction value or a liquidation value or a saving on expenses), Determination of the earnings value of the company as the sum of the future successes discounted to the cash value or determination of a combination value in which both the intrinsic value and the future value of the company are included and linked to a new size. Other reference values for a company valuation are - in the case of listed companies - the market value of the shares and - in the case of freelance practices - the annual turnover of the company.

Comparative cost advantages

Comparative advantages are relative advantages. A scientist named Ricardo addressed this connection several centuries ago. It means that a country A should trade with a country B, for example, even if there would initially be no obvious production advantage. His reasoning: If you compare z. B. a 2-product economy (chairs and tables are produced) the respective production time of the two products, it can be that one country can produce a product relatively cheaper than the other country. In this case one should go into trade with the other country. The price that was applied was the production time of product A that would have to be invested in the production of another product B. It was amazing to realize that a country

Consumer Goods

Durable goods are production or consumer goods that can be used several times and are therefore only physically worn out or technically obsolete after a long period of use. Examples: buildings, machine tools, cars, computers and the like.

contribution margin

The contribution margin is generally understood to be the difference between the sales revenue and the variable costs (of the relevant accounting period) that are absolutely necessary for the creation and exploitation of the sales performance in question and are therefore directly attributable.

contribution margin

Contribution Margin Accounting

Contribution margin accounting is - in contrast to full cost accounting - a method of partial costing. It is based on the distinction between fixed costs and variable costs and is based on the determination of the so-called contribution margin as the difference between the sales revenue E and the total variable costs (DB = E - vK) or the market/sales price P of a good and the associated variable costs vk per service unit (db = P - vk). If the contribution margin DB or db determined in this way is less than zero, then it is obvious that the provision of services is irresponsible from a business point of view, because the sales would not even cover the direct (material or wage) costs, let alone contribute to covering fixed costs. An operating result BE greater than zero, i.e. a profit G, can only be achieved if the contribution margin after deducting the fixed costs is greater than zero. In addition to this single-stage DB calculation, you can also carry out a multi-stage DB calculation. As an instrument of controlling, the DB invoice allows a business-based decision-making process on such problems as increasing/reducing the volume of services to be marketed for certain products, in-house production or external procurement for certain products (make-or-buy decision), acceptance/rejection of additional orders

Contribution Margin Accounting

contribution margin relative

A relative contribution margin is to be understood as the contribution margin of a product, which is set in relation to 1 unit of the performance factor, which, as a bottleneck, limits the company's possible scope for action with regard to the output of output goods. This bottleneck can affect the capacity of a process stage or the possible use of a resource (material, energy, space, etc.). Determining the relative contribution margin is the starting point and basis of the bottleneck analysis.

contribution margin relative

controlling

Controlling, derived from "to control" (= "steer"), is a cross-sectional management task and service in the company. From a functional point of view, controlling aims to provide the decision-makers in the management of the company with information, means and methods that allow them to plan and control the company's business operations according to the requirements and objectives of high business efficiency. Typical of controlling is the goal orientation (support of corporate management through business-determined targets such as return on sales, return-on-investment targets, cash flow rate, etc.), the change orientation (participation in the design of the company as a learning organization) , the bottleneck orientation (detection and elimination of bottlenecks in the company process as an effective means of increasing business efficiency) and the influence orientation (implementation of measures to improve business efficiency in effective management of business activities). This controlling procedure always takes place as a unit of a feed-forward consideration (future orientation) with feedback mechanisms (feedback effects from expired and ongoing company processes). With regard to the fields of activity and the controlling instruments used, a subdivision into strategic controlling and operational controlling makes sense. In order to ensure the effectiveness of controlling - in accordance with the controlling concept of the company -

controlling

controlling concept

The controlling concept is to be understood as the company-specific technical content, institutional and instrumental design of controlling as part of the overall management of a company. The controlling concept should primarily provide information on the following questions: Which factual objects (processes, areas of responsibility, projects, resources) are included in the controlling? Examples: R&D controlling, logistics controlling, personnel controlling, investment controlling and the like. Who (as persons and those responsible) is responsible for controlling tasks? Examples: Controlling as a staff department of the company management, controlling as a separate department or linked to business accounting or business finance. Which controlling instruments are mainly used? Examples: ABC analysis, break-even analysis, portfolio analysis, etc. Which controlling information is to be created, documented, forwarded and presented and how? Examples: Development of early warning information on market developments in the company's strategic business areas; Development of analysis and forecast information on the development of free cash flow; Development of TARGET/ACTUAL comparisons for the development of operative cash flow, return on sales and other business indicators. What hardware and software basis does the company's controlling system have and how are online solutions (via e-mail, internet or intranet) included in the development and transmission of controlling information? Examples: Development of a computer-aided controlling control center in the company; Use of online solutions for cash flow management and the like

controlling concept

Controlling strategic

Strategic controlling includes the performance of general controlling tasks with a planning horizon of more than one fiscal or budget year. As a cross-sectional service function, strategic controlling aims to support the decision-makers in the institution concerned (company, operations, administration) in the selection of strategic goals and projects by providing information and instruments in such a way that they are necessary to ensure the future viability of the institution the right tasks and strategies are determined in each case. The focus of strategic controlling is therefore recognizing and developing the facility's potential for success, taking into account the given and changing environmental conditions and the resulting opportunities and risks for the continued existence of the facility. The "feed-forward" control is primarily realized via the strategic corporate planning, while the "feedback" actions are primarily designed via early detection and early warning systems.

Controlling strategic

corporation

The corporation is a legal form of company that, in contrast to sole proprietorships or partnerships, has its own legal personality (= legal entity) and in which the founding and existence of the company is independent of the number of members or shareholders. The liability of the company is limited to the equity of the company. The members of the company can, but do not have to, participate in the management process of the company, since corporations can be managed and represented externally by authorized managing directors or board members according to the principle of third-party organs. The corporations include the limited liability company (GmbH), the stock corporation (AG) and the limited partnership on a stock basis (KGaA).

Cost accounting partial cost accounting

In contrast to full costing, partial costing is based on the differentiation of costs into fixed and variable costs. This approach makes it possible to make the influence of the degree of employment on the level of costs transparent. The partial costing is used directly in the contribution margin calculation and in the break-even analysis. The contribution margin indicates the extent to which the fixed costs (e.g. per item) can be covered by sales (e.g. per product; i.e. per item) and what contribution is also available as profit (e.g. per item). In the same way, the contribution margin calculation can also be calculated for each product group, department or company. The break-even analysis determines from which output quantity a profit is generated. Here, too, it makes sense to differentiate between fixed costs and variable costs. The fixed costs are calculated as a base amount to which the variable costs are then added up cumulatively: K= Kfix + kv*x (K=total costs, kv= variable costs per piece, x=output quantity). At the same time, the turnover is offset: turnover (U) = price (P) * quantity (X). From a sales volume (X) where the turnover (U) exceeds the costs (K) (or is exactly the same), break-even is reached.

cost and performance calculation

Cost and performance accounting is the company's internal tool for depicting the operational process-related value consumption (in the costs) in relation to the value created as part of the output of the operational performance. It also serves to check the profitability of the operating process. With regard to the practical form of organization, cost and performance accounting takes place in the following stages: as cost type accounting (determination of costs according to the type of their origin and cause, for example with distinctions according to material costs, personnel costs, etc.), as cost center accounting (determination and allocation of costs according to the place where it was caused, whereby the cost centers are usually congruent with functional and responsibility areas in the company), as a cost object unit calculation (= costing calculation) to determine the cost price and prices as well as a cost object time calculation (= operating result calculation) to determine the short-term periodic profit in terms of the operating result (see also cost objects). The cost and activity accounting can be designed as a full cost accounting or as a partial cost accounting. The difference between these two approaches lies in how fixed costs are treated in the cost accounting process. In full costing, the fixed costs are distributed proportionally to the performance units, i.e. proportionally, while in partial costing a strict distinction is made between disposition-independent (fixed costs) and disposition-dependent (variable) costs.

Cost jump fixed

In the case of step-fixed costs, the behavior of the costs depends on the production/output quantity x, in which the level of the fixed costs changes in leaps and bounds. This is due to the fact that when a certain limit of the possible output size x is exceeded, new requirements are placed on the capacity required for this and on other process requirements, which are to be regarded as (fixed) costs of operational readiness in terms of their expenditure. Examples: setting up a second production line in a plant that produces plastic pipes; Expansion of automated workstations in order to be able to satisfy customer requests when the order situation is good, and the like.

Cost Normal Cost

Normal costs are average values of actual costs that form the basis of the company's internal cost accounting over a longer period of time. In standard cost accounting, the following are used: fixed transfer prices for materials, fixed wage rates and fixed overhead surcharge rates. The advantage of using normal costs - compared to actual costs - is that fluctuations in the cost factors, such as changes in the procurement prices for materials, changes in wages (e.g. due to overtime), different scrap quantities, etc., are largely eliminated by the averaging. so that there are better calculation bases for cost planning and preliminary calculations when determining offer prices. The post-calculation procedure must then be used to check

cost type accounting

The task and goal of cost type accounting is to record and identify all costs incurred in the relevant period for the creation and utilization of the operational service according to the type of causation. The cost type accounting is the starting point and the basis for the entire system of cost and performance accounting. It represents the link between the bookkeeping and the subsequent areas of cost accounting (cost center accounting, cost unit accounting). (personnel costs) and asset accounting (depreciation). Furthermore, the imputed costs of the period are recorded and included in the cost type calculation. The costs recorded in this way are the starting point for a more in-depth cost analysis and for the allocation of costs according to cost centers and cost units. Cost type accounting is an important basis of cost controlling.

cost unit accounting

Cost unit accounting is carried out on a period-related basis as a cost unit time calculation using an operating billing sheet (BAB II) or as a cost unit unit calculation in the sense of cost and price calculation. The task of the cost unit time calculation is to allocate the costs incurred in a period (= month) to the individual cost units according to their cause, in order to make the economic efficiency of these cost units transparent. The source data for the cost unit time calculation are the recorded actual direct costs of the cost units and the normal cost surcharge rates (from the BAB I cost accounting sheet). Since the administrative overheads and the selling overheads are to be offset against the production costs of the sales performance (and not on the production costs of the service produced), the changes in inventories for unfinished and finished products must be taken into account in the cost unit time calculation. Another problem with cost object time accounting is that the normal overheads determined using normal overhead rates can deviate from the actual overheads of the accounting period: If the normal overheads are higher than the actual overheads, there is a cost over-recovery, otherwise there is a cost under-recovery. The operating result is then determined as follows: Operating result = sales result + cost overrun Operating result = sales result - cost undercover The task of unit cost accounting is to determine the cost of the individual cost units as a basis for the offer or actual costing (see calculation). Another problem with cost object time accounting is that the normal overheads determined using normal overhead rates can deviate from the actual overheads of the accounting period: If the normal overheads are higher than the actual overheads, there is a cost over-recovery, otherwise there is a cost under-recovery. The operating result is then determined as follows: Operating result = sales result + cost overrun Operating result = sales result - cost undercover The task of unit cost accounting is to determine the cost of the individual cost units as a basis for the offer or actual costing (see calculation). Another problem with cost object time accounting is that the normal overheads determined using normal overhead rates can deviate from the actual overheads of the accounting period: If the normal overheads are higher than the actual overheads, there is a cost over-recovery, otherwise there is a cost under-recovery. The operating result is then determined as follows: Operating result = sales result + cost overrun Operating result = sales result - cost undercover The task of unit cost accounting is to determine the cost of the individual cost units as a basis for the offer or actual costing (see calculation). If the normal overhead costs are higher than the actual overhead costs, there is a cost surplus, otherwise there is a cost deficit. The operating result is then determined as follows: Operating result = sales result + cost overrun Operating result = sales result - cost undercover The task of unit cost accounting is to determine the cost of the individual cost units as a basis for the offer or actual costing (see calculation). If the normal overhead costs are higher than the actual overhead costs, there is a cost surplus, otherwise there is a cost deficit. The operating result is then determined as follows: Operating result = sales result + cost overrun Operating result = sales result - cost undercover The task of unit cost accounting is to determine the cost of the individual cost units as a basis for the offer or actual costing (see calculation).

Costs

Costs are the consumption of input goods valued in money, which are used and consumed for the purpose of creating and marketing the operational performance and for maintaining and renewing the company's capacity required for this. From this definition, it should be inferred that the concept of costs contains three important components: It is a matter of quantitative consumption of material goods and services, which is valued in money and which is ultimately determined by the operating process. In business practice, the purpose of recording costs is to determine the expenses incurred in the actual business process, differentiated according to cost types, in order to then allocate them to the areas of responsibility (= cost centers) and to the salable products (= cost units) according to the cause. Costs are to be delimited from expenses. In this context, costs are divided into basic costs (= costs equal to expenses) and imputed costs as a generic term for additional costs and other costs.

costs common surcharge

Overhead surcharges are indirectly charged costs that are added to the respective individual costs or production costs as part of cost and price calculations. The basis for this allocation is the relevant overhead rate (see graphic). Overhead surcharges are - for example - to be determined for material overheads (basis: direct material costs) production overheads (basis: production wages or machine hourly rates) administrative overheads (basis: production costs of sales) sales overheads (basis: production costs of sales).

costs other costs

Other costs are the components of imputed costs that have factual equivalents in the expense account of the bookkeeping, but with a different value approach than in cost accounting. A typical example of other costs is depreciation: The depreciation is recorded in the bookkeeping. They relate to the acquisition or production costs. As a rule, the geometrically declining balance method of depreciation is also used in order to exploit possible tax advantages. In cost accounting - with a view to the calculation of prices - on the other hand, imputed depreciation is determined. The starting point for this is - as a rule - not the acquisition costs, but the replacement costs. Linear depreciation is used as the depreciation method - due to the uniformity of the depreciation. In the period-based comparison, different values arise, so imputed depreciation is treated as other costs. The offsetting of the different values takes place via cost accounting corrections.

costs overheads

Overheads are the expenses (in monetary terms) that demonstrably arise in the process of operational performance and utilization, but - in contrast to individual costs - cannot be directly allocated to the individual products. Typical types of overhead costs are: Depreciation for machinery and equipment Rent Management salaries General administrative costs such as telephone charges, travel expenses and the like.

costs variable

Variable costs are the operational process-related expenses valued in monetary terms, which are causally connected with the creation of earnings. They can be recorded for each unit of the goods to be manufactured or assigned to each unit of the output quantity based on the cause. Variable costs are disposition-dependent costs, they change causally depending on the employment. According to their economic content, variable costs are monetary expressions for product-related material, energy and personnel expenses and for other expenses that can be allocated to the goods to be produced (e.g. licenses, commissions). If - for example - a 10% change in output leads to a 10% change in costs, then we determine the value R = 1 for R. There is a proportional behavior of the variable costs. The employment-proportional costs per performance unit are constant! This is understandable, because every good produced causes the same increase in costs per ME. If the case R > 1 occurs, then there is a disproportionate cost behavior. One therefore also speaks of disproportionate costs. In practice, such a situation occurs in particular when the transition to the maximum principle in the production of services is completed, ie when the "process speed" is increased by increasing the intensity. This leads to a progressive, disproportionate increase in costs, especially in the area of tool, energy and repair costs, but also in the area of personnel costs (due to the payment of overtime and special bonuses). If, on the other hand, the case is 0 < R < 1, the cost behavior is disproportionately low. Such underproportional costs increase with the output quantity, but not proportionally. This is typical for costs from the consumption of auxiliary and operating materials, but also for input goods that could be procured more cheaply as a result of the granting of volume discounts.

credit supplier

In the case of a supplier credit, as a short-term source of financing, the supplier grants the customer a payment period of usually 3 - 4 weeks (customers with high buying power (grocery chains) are sometimes granted up to 90 days). In the best case, the payment term is extended until the goods are sold. The supplier credit is thus paid from the sales proceeds and the supplier thus assumes the financing costs for the entire inventory. This form of financing is popular because it's simple and informal, and it also appears to be interest-free. However, if this “credit potential” is also included as real credit, then one can come to the conclusion that very cheap credit can be obtained from suppliers. In return, the profit from timely or early paid cash discounts should also be taken into account.

current assets

In monetary terms, current assets include all of the assets that do not continually serve the company's business operations and that often even play a role in just one capital circuit. For the assignment of goods to current assets (as part of the assets/assets of a balance sheet), the intended purpose on the part of the company is decisive. Current assets are generally grouped according to the following main items - regardless of the criterion used in the structure of the balance sheet: Inventories of raw materials and supplies, merchandise, finished and unfinished products and advance payments Receivables, particularly from the delivery of goods and services, and other assets Securities classified as current assets such as shares in affiliated companies, mortgage bonds, Corporate bonds and the like. Cash such as cheques, cash on hand, bank and postal giro balances. The valuation of current assets is based on acquisition costs (for externally purchased goods) or production costs (for self-made goods).

cycle time

"Cycle time - also called work cycle or cycle - is the time in which a quantity unit is completed so that the flow system achieves the target quantity output" Planned cycle time = available production time / required production units

D

DAX

DAX is the abbreviation for German share index. This index includes the 30 German stocks with the highest turnover and thus represents more than 60 percent of the share capital of listed German companies. The DAX is recalculated and published every minute on the Frankfurt Stock Exchange using prices from floor trading and computer trading (Xetra). The base date for the DAX was December 30, 1987, because at this point in time the base value of the DAX was fixed at 1000 points. In addition to the DAX, other stock indices have recently also been calculated, such as the DAX 100 (it includes 100 German variable-traded standard values), the DAX 100 sector index (based on the DAX 100 and represents 10 sector indices, for example DAX 100 automobiles and transport), the CDAX (it contains the prices of all domestic shares,

DAX

debentures bonds

Bonds are debentures that private companies or public households use to obtain long-term debt capital on the capital market. The debenture itself is usually a fixed-income security under the law of obligations, and the issued promissory note serves as evidence in this context. The individual pieces of a bond are called partial bonds. The holder of such a partial debenture can sell the debenture on the stock exchange without the consent of the debtor in order to get his capital back earlier. The bonds issued by private industrial companies are called corporate bonds. A distinction is made between: Income bonds In this case, the lender is entitled to a share in the profit that the debtor achieves from the use of the capital, in addition to an agreed minimum interest rate for the bond granted. the convertible bonds In this case, the lender has the right, if necessary, to require the bond to be exchanged for shares at a time agreed in the bond. the bond with warrants This form of industrial bond is equipped with a subscription right to shares, i.e. there is no exchange "bond - shares" (as with the convertible bond), but an additional purchase of shares, namely at a time and at a price that agreed in the bond. which the debtor achieves from the use of the capital. the convertible bonds In this case, the lender has the right, if necessary, to require the bond to be exchanged for shares at a time agreed in the bond. the bond with warrants This form of industrial bond is equipped with a subscription right to shares, i.e. there is no exchange "bond - shares" (as with the convertible bond), but an additional purchase of shares, namely at a time and at a price that agreed in the bond. which the debtor achieves from the use of the capital. the convertible bonds In this case, the lender has the right, if necessary, to require the bond to be exchanged for shares at a time agreed in the bond. the bond with warrants This form of industrial bond is equipped with a subscription right to shares, i.e. there is no exchange "bond - shares" (as with the convertible bond), but an additional purchase of shares, namely at a time and at a price that agreed in the bond. agreed in the bond. the bond with warrants This form of industrial bond is equipped with a subscription right to shares, i.e. there is no exchange "bond - shares" (as with the convertible bond), but an additional purchase of shares, namely at a time and at a price that agreed in the bond. agreed in the bond. the bond with warrants This form of industrial bond is equipped with a subscription right to shares, i.e. there is no exchange "bond - shares" (as with the convertible bond), but an additional purchase of shares, namely at a time and at a price that agreed in the bond.

debt financing

In contrast to self-financing, in the case of debt financing, money and material resources are made available by people outside the company, with no obligation to bind oneself to the fate of the company. This third-party capital is limited, whereby the period can be agreed individually. Unlike shareholdings, creditors do not benefit directly from the company's growth. At the same time, there is no entrepreneurial risk.

debtor

The customer is a debtor. From a company's point of view, this is primarily about the debtors who have outstanding trade receivables. The task and goal of accounts receivable is therefore to always provide a clear overview - if possible according to terms and sizes - of all unfulfilled but legally valid claims against third parties. This is then the basis for dunning and collection.

debtor

Declining geometric depreciation

The form of depreciation in which the annual depreciation percentage p - based on the respective book value of the previous year (= residual value R with index k-1) - remains constant is called geometrically degressive depreciation.

Declining geometric depreciation

deflation

Deflation is the phenomenon in an economy that is characterized by an absolute fall in prices. The downward trend in economic development can be consolidated by the appearance of deflation.

deflation

Deflation is the phenomenon in an economy that is characterized by an absolute fall in prices. The downward trend in economic development can be consolidated by the appearance of deflation.

deposit

A down payment is the advance provision of funds by a buyer (customer) to a manufacturer/supplier. In the sales business with customers, it is becoming increasingly common to agree on a down payment (e.g. in the amount of one third of the contract amount) when concluding a contract for the provision of a service or for the manufacture and delivery of a product. This payment by the customer to the supplier/manufacturer gives both partners more certainty about the quality and timely fulfillment of the contract: The supplier/manufacturer improves his liquidity during the period of contract fulfillment by providing interest-free funds, while the customer makes claims and customer-specific solutions with the down payment can.

deposit

depreciation

Depreciation means both the means of adjusting the value of assets that have fallen in value and the process of reducing the value of depreciable fixed assets over time. The impairment reflected in a write-down represents an expense. This periodic expense is to be reported in the income statement. The tax term corresponding to depreciation is called depreciation for wear and tear (AfA). A distinction must be made between scheduled depreciation for depreciable fixed assets and unscheduled depreciation for depreciable and non-depreciable fixed assets and current assets. The depreciation of fixed and current assets in the bookkeeping (as part of the tasks of the income statement) is called balance sheet depreciation. The depreciation calculation carried out in cost and performance accounting is called imputed depreciation.

depreciation

Depreciation Extraordinary

The task and concern of unscheduled depreciation is to make any reductions in value that have occurred or are foreseeable in the case of depreciable and non-depreciable fixed assets economically effective by assigning a lower value to these goods on the balance sheet date. This lower value cannot be a specific value, since - for example - there are no exchange or market prices for items of tangible assets that - as with items of current assets - provide sufficient indications for an unscheduled depreciation to be applied. A value is to be determined as a 'lower' value which - under the aspect of the lowest value principle - provides a reasonable valuation for the relevant asset.

Depreciation Extraordinary

discount

The disagio (also called damnum) is a payout loss. For example, if a loan of 100,000 [EUR] is paid out at a rate of 95%, the borrower will only receive 95,000 [EUR] in real terms, but 100,000 [EUR] must be repaid. According to its content, the discount is a one-time interest payment for the provision of capital, which - from a business point of view - is distributed over the entire term of the loan. The discount may - under commercial and tax law - be activated by the borrower as a deferred item and amortized over the term of the loan. However, this activation is only possible in the year the loan was taken out.

discount

Discount

A rebate is a price reduction that a manufacturer/seller grants a customer for certain services. Depending on the type of service or the price policy objective within the framework of a company's remuneration policy, a distinction is made between volume discounts (price reduction for certain purchase quantities) function discounts (payment for the performance of trading functions by wholesale and retail companies) time discounts (price reduction for orders before a certain date, e.g. introductory discount, or when ordering/accepting within a certain period of time, e.g. seasonal discount) and loyalty discounts (as an incentive for customers to keep buying from the supplier)

discounting

Discounting is the discounting of a final capital Kn amount of money to the present value K0: The discounting factor is the reciprocal of the compounding factor qn.

discounting

Discounting is the discounting of a final capital Kn amount of money to the present value K0: The discounting factor is the reciprocal of the compounding factor qn.

distribution

Distribution (= distribution) means the design of the sales channels and the entire sales logistics. The task and concern of the distribution policy as part of the marketing concept of companies is to achieve optimal customer satisfaction by choosing suitable sales channels and by designing cost-, time- and distance-favourable solutions for the delivery of goods. Direct sales (with the associated direct marketing) are particularly important in this concept.

distribution

diversification

Diversification means the expansion of a company's fields of activity by offering new products on new markets (regions, target groups). This is the case, for example, when a company that has previously been active in the area of manufacturing and selling hardware now also enters the area of online services with its own software solutions. A distinction is made between the following directions of diversification: Horizontal diversification: The existing range is supplemented by products which - from the customer's point of view - are factually related (eg including the sale of CD-ROMs in the "classic" book trade). Vertical diversification: Products or technological processes are included in the company's range of services, which were to be regarded as upstream or downstream process stages in relation to the previous profile (e.g. inclusion of the physical production of CD-ROMs in the service program of a software producer). Lateral diversification: Products or technological processes are included in the company's range of services that are not related to the previous products or process stages (e.g. development and sale of self-created software in the range of services of a mechanical engineering company). With lateral diversification, the policy of spreading the market risk is pursued. technological processes included in the company's range of services that are not related to the previous products or process stages (e.g. development and sale of self-created software in the range of services of a mechanical engineering company). With lateral diversification, the policy of spreading the market risk is pursued. technological processes included in the company's range of services that are not related to the previous products or process stages (e.g. development and sale of self-created software in the range of services of a mechanical engineering company). With lateral diversification, the policy of spreading the market risk is pursued.

diversification

dividend

A dividend is a share of the unappropriated profit of a stock corporation that is paid out to the shareholders. The AGM decides on the amount of the dividend.

dividend

A dividend is a share of the unappropriated profit of a stock corporation that is paid out to the shareholders. The AGM decides on the amount of the dividend.

Double bookkeeping

Double-entry bookkeeping is the system of modern commercial accounting, regardless of whether it is carried out manually or with EDP accounting software. It is characterized by the following three features: Every business transaction is posted twice, ie on two account pages, namely on one or more accounts in the debit and on one or more other accounts in the credit. The total of the debit postings must be equal to the total of the credit postings. The stocks of the balance sheet are updated on stock accounts (asset and liability accounts) and on capital accounts (profit and loss accounts and private accounts). Success is also determined twice, via the equity comparison and as the balance of the profit and loss account.

Double bookkeeping

draft

A bill of exchange is a drawn bill of exchange in the sense of a payment request: the issuer of the bill of exchange requests the drawee to pay the bill of exchange amount at a specified later date at an agreed payment office.

Du Pont code system

The Du Pont indicator system is a scheme developed by the American company Du Pont Inc. to determine the key indicator return on investment (ROI) from the indicators "capital turnover" and "profitability on sales".

Du Pont code system

Dynamic debt dynamic V degrees

The theoretical repayment period (also known as the dynamic leverage ratio) indicates the period in which the debt could be repaid if a certain amount of net cash flow is generated year after year.

Dynamic debt dynamic V degrees

The theoretical repayment period (also known as the dynamic leverage ratio) indicates the period in which the debt could be repaid if a certain amount of net cash flow is generated year after year.

E

EBIT

EBIT stands for Earnings Before Interest and Taxes. The key figure EBIT is used within the framework of controlling to determine the earnings available for the return on capital employed.

EBIT

EBIT stands for Earnings Before Interest and Taxes. The key figure EBIT is used within the framework of controlling to determine the earnings available for the return on capital employed.

economics

The key figure of profitability is a measure of the effectiveness of the value-based transformation of the incoming goods into the outgoing goods in a company process. It provides information on how many monetary units of income (as the output of the process) are achieved in a defined period T if one monetary unit of effort is used as input. This results in the following formula-based determination of the profitability indicator: Income/expenditure If you restrict this consideration to the actual operating process, the profitability indicator then captures the relation between performance (as the output of the process) and costs (input of the process): Performance/costs, ie: Printing machine makes 1000 sheets per hour. It should be noted that in determining the quantities in the numerator and in the denominator, the (factor or the market) price of output goods (price per 1,000 sheets) or price of input goods (wage price per hour). It is therefore advisable to eliminate the price influence when determining the profitability in the company and in the period comparison by referring to a defined price basis.

Economics of scale

The Economics of Scale policy is based on achieving economic effects from economies of scale (in the output volume of products). This possibility results from the cost degression of fixed costs: The higher the output quantity x [ME], the lower the fixed costs of the company that can be allocated to a product unit.

Economics of scale

Economics of scope

The Economics of Scope policy aims to achieve economic benefits from increasing production diversity. This is always achievable when the same pool of resources can be used when providing the service - due to the technological similarity of the products.

Economics of scope

effort

Expenditure is to be understood as the monetary expression of the period-related, profit-effective consumption of value in the entire (goods management) company process. It is recorded in the accounts and included in the income statement at the end of the financial year. The expense is broken down into a functional expense and a neutral expense. The purpose expense is the period-related consumption of value that arose for the creation and utilization of the operational service in accordance with the operational purpose. In cost accounting, it corresponds to the basic costs. Neutral expenses, on the other hand, have no equivalent in cost accounting. These are non-operational, extraordinary or non-periodic expenses. The expense category refers to the consumption of goods in the company process,

effort

Effort neutral

Neutral expenditure is the consumption of value in the company process, which is assigned to the so-called 'non-costs' area for reasons of the necessary business distinction between expenditure and costs. The following are included in the neutral expenses: causally non-operating expenses that have nothing to do with the operating process (example: donations for charitable purposes); Extraordinary expenses that are operational, but because of their irregular (fluctuating) occurrence or because of their large extent or because of their special nature, they do not belong to the 'normal' expenses and therefore also not to the calculable costs. Example: Expenses for the repair of operating facilities, expenses relating to other periods than expenses that were caused in previous periods, but are now due for offsetting without a corresponding passivation having been carried out. Example: additional tax burden in addition to the tax provision made The neutral expenses also include expenses that arise from the realization of the business purpose, but are treated neutrally. These are actual expenses for interest on borrowed capital, for depreciation, for actual risks, etc., insofar as they exceed the amounts calculated for this purpose.

Effort neutral

Effort of extraordinary…

Extraordinary expenses are those items of neutral expenses that are operational, but because of their irregular (fluctuating) occurrence or because of their large extent or because of their special nature, they do not belong to the 'normal' expenses and therefore do not belong to the calculable costs . Examples: Expenses for the repair of operating facilities, machines and systems that were destroyed or badly damaged as a result of a fire or an accident; high price losses in securities; Sale of assets well below book value and the like. The extraordinary expenses are to be compared with the extraordinary income in the income statement. The balance of these two figures is the extraordinary result.

Effort of extraordinary…

elasticity

The elasticity of a variable is determined by the relative (percentage) change in a dependent variable in the context of the relative (percentage) change in an independent variable: Let P be the price and Delta P the percentage change in that price, X the quantity demanded and DeltaX the percent change in quantity demanded. Then the so-called price elasticity of demand can be determined with the help of the above relationship. It is determined by calculating DeltaX/DeltaP. If one considers the dependency of the costs K on the degree of employment (or the output quantity) X, then instead of elasticity, the degree of reactivity R=DX/DK is usually spoken of.

Employment Law

Labor law deals primarily with the following issues: • Employment contract • Working hours • Day and night work • Continued payment of wages if the employee is unable to work • Holidays and days off • Termination of the employment contract • Registration with the social security system • Occupational safety

Employment Law

equity "economic"

Standard equity + shareholder loans + loans from family members + contributions from silent partners + clearing accounts for limited partners + special items with an equity portion + pension provisions for managing partners The economic equity is important for the risk situation of your company, as it has a buffer function in the event of losses. In addition, the equity also sends a signal to the bank. With a high equity share, the owner expresses his confidence in his own company.

equity "economic"

Equity capital

Equity explains the origin of that part of the company's assets that has been made available by the company's legal owners to carry out the company's processes. The balance sheet equity is used to calculate the equity. This size results from the basic relationship of the balance sheet from the difference between the balance sheet total and borrowed capital: Balance sheet total - borrowed capital = equity It should be noted, however, that the balance sheet equity and the actual asset value of the shareholders usually do not match. This is due to the fact that by choosing certain valuation approaches, it is possible to form so-called hidden reserves that are not visible in the figures on the balance sheet. On the balance sheet, the following components of equity are shown - on the liabilities side of the balance sheet - as items of the source of funds: the subscribed capital as shares of the company's owners (in the case of a GmbH this is the share capital and in a stock corporation this is the share capital), the reserves in the form of capital reserves (in the case of corporations) and retained earnings, the profit carried forward as unused profit from the previous year (a loss carried forward reduces equity) and the annual profit (annual surplus) as a result of the income statement for the past financial year (an annual loss/annual deficit as a negative 'success ' reduces equity). Equity according to the balance sheet has the following important functions: It represents - in the associated the company's assets reported on the assets side of the balance sheet - the economic basis for the start and continuation of the company's business operations. It shows the scope of liability for liabilities incurred to the lenders and partners of the company. The structure of equity shows who is the owner of the company and to what extent, and to whom profit or loss is to be allocated. In the case of corporations, the equity capital marks the limit for the distribution of profits, i.e. the shares may not be reduced by a distribution of profits. It should also be noted that equity capital constitutes a participation relationship, it thus guarantees performance-related payment requirements for the company as well as a right to have a say in the management, provided there are no statutory restrictions on this. It is - usually - available indefinitely. The return on equity is an indicator of how profitable the equity employed is.

Equity capital

equity financing

Equity financing is a cheap or perhaps expensive form of raising capital. It depends on the individual situation. While a loan incurs interest as a cost, participation does not incur any costs. An obligation arises from the investment only after an after-tax profit has been made. The participation will be paid out from the resulting profit. Participations can be of different nature. On the one hand, it can be based on a payment into the share capital of a corporation. On the other hand, it can also be a time-limited participation. In this case one speaks of so-called mezzanine capital. This is like a loan with no interest. Something is only paid out if there is a profit.

equity financing

Estimated costs

Imputed costs are the components of the costs that deviate from the expenses of the relevant period. They are determined according to the purposes of cost accounting, not those of bookkeeping.

exchange rate

The exchange rate is the price fixed in the domestic currency (e.g. "Euro") for a foreign currency (e.g. "USD"), which is quoted on a foreign exchange exchange. The reciprocal price quotation at the exchange rate is the exchange rate.

exchange rate

Exchange rate

The exchange rate is the price of a foreign currency unit (e.g. "USD") that one has to pay in the domestic currency (e.g. "EUR") - usually for a unit of this foreign currency. The reciprocal of the exchange rate is the exchange rate.

expenditure

The expenses (of a period) include all payments for this period, provided they are not accompanied by decreases in debt or increases in receivables, plus the period-related increase in trade payables and less the payments on account or advance payments made in the period. Typical expenses are: purchase of material goods by cash payment, payment of the monthly rent for a commercial space on the '1. of the month', monthly wage and salary payment by bank transfer, eg on '15. of month'. However, expenses and payouts are not always the same. There are expenses that do not cause any payment in the period in question, for example: receipt of goods that are to be paid for with payment terms and there are payments that generally do not represent any expenses, for example:

expenditure

F

FIFO

The FIFO method is a method of evaluating inventories as part of the annual financial statements work. This method assumes that the assets that were procured or manufactured first were also used or sold first. Hence the name 'First - In - First - Out'. If all additions to the inventory are recorded precisely, it is sufficient when using the FIFO method to start with the last delivery in the period and add up the delivery quantities until the quantity of the final inventory to be valuated is reached. The FIFO method is to be used when prices tend to fall.

financing

Financing (of a company) means all measures that are aimed at securing the company process in the long, medium and short term by raising and providing capital in the form of money and monetary goods. This includes the business management of the cash flows caused by goods and finance (incoming payments, outgoing payments). Financing is therefore linked to the following questions: How large is the company's short, medium and long-term capital requirement? How can the capital requirements (short, medium and long term) be covered? How can a minimal effort financing of the business process be secured? The opposite of financing is investment, i.e. the use of financial resources for the initial equipment,

financing in general

Forms of financing mean the possibility of obtaining and using financial resources to finance the assets that are shown as assets of the company on the assets side of the balance sheet. Typical forms of financing are deposit financing, equity financing, the various options for short-term and long-term external financing and forms of internal financing.

Financing Participation

Participation financing is when parts of the assets shown in the balance sheet can be traced back to contributions (in the form of money, material goods and/or rights) from new owners. The opportunities for equity financing for companies without access to the stock exchange are limited. In addition, in these cases, previous owners will only agree to equity financing after careful consideration and examination, since the new shareholders acquire the right to have a say in the management with their participation. But there are also problems for those who are willing to participate, since a deposit is always risky and cannot be sold again so quickly. The situation is different for stock corporations. If deemed necessary, they can issue 'young' shares and in this way bring about a capital increase, usually in connection with the creation of new capital reserves. Note: Deposit financing and equity financing are - collectively - also referred to as the company's own financing. With the emergence of the European Economic and Monetary Union (EMU), equity financing is gaining particular importance: Multinational corporations are created through Europe-wide mergers, joint ventures with companies that already exist in the target country, or branch offices through targeted direct investments. The introduction of the EURO simplifies the business calculation of opportunities and risks of participation,

finished products

The stock of finished goods and work in progress is the value of the inventories of salable (finished) and processed (unfinished) products or services of a company to be valued at production cost at the end of a period (end of the month or balance sheet date). The change in inventory of finished goods and work in progress (as the difference between the ending inventory and the beginning inventory of the period) is shown as (signed) inventory performance. In this content, the inventory change is an important adjustment item in the nature of expense method as one of the methods of the income statement.

Fiscal Policy Economics

Fiscal policy refers to the use of public finances in the service of economic and growth policy. Fiscal policy is aimed at fulfilling the tasks of the state as an actor in the economic cycle and at influencing the course of the economy with financial policy instruments. According to this, the following goals are the special focus of fiscal policy: - the fiscal goal (covering state expenditures with corresponding income) - the stabilization goal in connection with economic policy, - the redistribution goal, especially in connection with social policy and - the allocation goal in connection with measures of structural policy and regional economic development.

Fixed costs

Fixed costs are the operational process-related expenses, evaluated in monetary terms, which arise in the company regardless of whether a service is provided and used or not. They also do not change causally when employment in the company changes. Fixed costs are therefore costs that are independent of disposition. A causation-based allocation of these costs to the output goods of the company is therefore not possible. According to their economic content, fixed costs are monetary expressions for expenses for the production and securing of operational readiness, as well as (imputed) interest and significant parts of depreciation and non-employment-related personnel costs.

forfaiting

Forfaiting means the non-recourse purchase of receivables (e.g. in the form of a bill of exchange) at a cash price by a forfaiter as part of foreign trade financing. In contrast to factoring, in which all claims are granted to the factor (global assignment), forfaiting refers to the purchase of individual, mostly mutually securitized claims.

funding inside

Internal financing includes - in contrast to external financing - all the procedures of corporate financing that are causally related to the sales process as an operational cycle of values. The company has thus generated and "earned" the funds for internal financing itself. Forms of internal financing are: - Financing from retained earnings (after taxes) - Financing from depreciation equivalents - Financing from provision equivalents - Financing from other capital releases.

G

GAAP

The Generally Accepted Accounting Principles (GAAP) are the accounting principles and procedures applicable to companies in the USA, primarily for the preparation of the balance sheet and the profit and loss account (statement of income). In contrast to commercial and tax law in Germany (but also in comparison to the procedure in Austria and Switzerland), US GAAP are not anchored in state or federal laws, but are regulated by the responsible institutions, namely the SEC (Securities and Exchange Commission ) as the supreme state regulator of stock exchanges and the FASB (Financial Accounting Standard Board) as the US federal association of auditors and modified. There are also differences in the objectives of accounting: The general idea of German commercial law is the protection of creditors (see HGB). In the USA, accounting is primarily about the information function of the balance sheet and the profit and loss account for the shareholders (shareholders). This also has consequences for the distribution and taxation policy: The management of US companies can determine the amount of the dividend independently of the determination of the balance sheet profit (in Germany, the individual financial statements of the parent company must first be available). The tax balance sheet is usually to be drawn up separately, a principle of the authoritativeness of the commercial balance sheet for the tax balance sheet (as in Germany) is not known de jure in the USA, and consequently no reverse authoritativeness of the tax balance sheet for the commercial balance sheet.

game theory

Game theory is the scientific discipline that deals with the development and application of models for the rational behavior of opponents in competitive situations. In such situations, the achievement of a goal Z that opponent A is striving for does not depend solely on one's own actions, but also primarily on how other opponents B, C, ... who are also striving for this goal Z, react to A's actions . Game-theoretical approaches primarily serve to derive decisions in situations of uncertainty.

GmbH

The limited liability company (GmbH) is a partly capital-related, partly personal corporation. It pursues economic purposes and therefore operates a commercial company that has a fixed share capital of a certain amount. The company is only liable for its liabilities with the company's assets. The partners are only personally and jointly liable insofar as the share capital has not yet been fully paid up. The GmbH represents its own legal personality and has a corporate structure. The management is usually the responsibility of the founding partners (self-organization). However, it can also be transferred to a third party as a non-shareholder (third-party tax group). In Germany, the share capital must be at least EUR 25,000. Of this amount, 50% (i.e. at least EUR 12,500) must be paid in at the time of founding in cash and/or in kind. In Austria, the share capital must reach a value of at least EUR 35,000, whereby the capital contribution of an individual shareholder must be at least EUR 70. In Switzerland, according to OR 773, the share capital of the GmbH must be at least CHF 20,000, but may not exceed the value of CHF 2 million. At least 50% of the share capital must be paid in when the GmbH is founded or - in the case of a non-cash foundation - be covered by contributions in kind. The GmbH can choose its company name freely. Personal names of the partners, material names or fantasy names can be used for this, but always supplemented by the abbreviation "GmbH" or written out as " The right to vote depends on the amount of the contributions to the share capital. The GmbH is a legal entity and according to § 6 HGB a merchant in the legal sense. Since 1981 there has been the possibility in Germany of founding a so-called one-man GmbH and running it as a sole proprietorship with limited liability. The right to vote depends on the amount of the contributions to the share capital. The GmbH is a legal entity and according to § 6 HGB a merchant in the legal sense. Since 1981 there has been the possibility in Germany of founding a so-called one-man GmbH and running it as a sole proprietorship with limited liability.

GmbH & Co. KG

The limited liability company and Co. KG is a legal form of company that corresponds to a limited partnership (as a partnership) in which the general partner is a GmbH (as a corporation). Due to the limitation of liability of the GmbH, the unlimited liability for partnerships is overridden in a GmbH & Co. KG. The management of the GmbH & Co. KG is the responsibility of the general partner, i.e. the managing director of the GmbH. As a partnership, the GmbH & Co. KG is not subject to the disclosure requirements of the GmbH. It is also more favorable from a tax point of view than the GmbH.

Goals

A goal is to be understood as a normative statement about a desired or to be achieved future state of reality. Target dimensions are: the target content (as a reference, e.g. increase in sales) the extent of the target (as a quantitatively dimensioned target, e.g. increase in sales by 5%) the reference to the target (e.g. sales in the plan year 19..) the location reference (e.g. sales volume to be achieved in the branch in location X) Destinations can be fixed differently in the system, e.g. B. according to the content of the goals (monetary goals such as sales, profit and the like, non-monetary goals such as market share, prestige and image, social goals such as employee satisfaction or ecological goals such as reducing pollutant emissions by ...%).

Golden Rule of Accounting

The golden balance sheet rule requires that the long-term assets tied to the company must be covered by long-term capital, usually through equity, while current assets can only be covered by short-term capital.

gross national income

The gross national income (GNI) is the economic output (value added) of an economy expressed in prices in an accounting period (e.g. calendar year). It is calculated from gross domestic product (GDP) plus income from the "rest of the world" (as the balance of earned income and property income between residents and the rest of the world).

gross national income

group

A group of companies is understood to be an association of companies that remain legally independent, but give up their economic independence in favor of a uniform management of the overall group of companies. Example: Company A acquires the majority of shares in companies B and C. Companies B and C remain under their own name, but future business policy will be determined by the board of company A (= group management).

H

highest value principle

The highest value principle is an important general valuation principle that satisfies the principle of commercial prudence. The highest value principle is to be applied both to the valuation of assets and to the valuation of liabilities. With regard to the valuation of assets, this principle states that the maximum valuation may be the acquisition or production costs. For example, land cannot be valued higher than acquisition cost, even if the current market value is higher. In the case of liabilities (with a term of up to 5 years), the highest value principle states that the higher repayment value of two values must always be used, even if this is only a temporary increase. Such a situation arises in particular when

I

illiquidity

Illiquidity is understood to mean a situation in which a company is not (or no longer) able to pay the liabilities due on the due date due to a lack of liquid funds. Illiquidity can lead to the initiation of insolvency proceedings.

income statement

The income statement is used to calculate the period-related income from the company's activities. It can be carried out using the equity capital comparison method or the income statement method prescribed by commercial law (nature of expense method or cost of sales method).

Indicator investment intensity

The investment intensity shows how high the share of fixed assets in the total capital is. Investment intensity = (fixed assets / balance sheet total) * 100% Significance of the key figure for the company: High investment intensity shows the capital intensity of a company. At the same time, it indicates the amount of a possible (re)investment requirement. The investment intensity provides information about how high the long-term capital commitment of a company is. It should be noted that high investment intensity can be associated with fixed costs such as interest, energy, space costs and depreciation. A high investment intensity reduces the flexibility of a company. This also relates to the ability to adapt to market changes and technological changes.

inflation

One speaks of inflation when an increase in the price level lasts for several periods and this leads to a decrease in the purchasing power of money.

Interest charges

Interest is the price for the temporary loan of capital. Of particular interest are the interest on borrowed capital that has to be paid for a loan taken out. Financial mathematical relationships are to be used to determine the interest in the context of the repayment calculation - such as annuity repayment or installment repayment.

Interest rate imputed..

The imputed interest rate (interest rate) is the interest rate (interest rate) that is used in investment calculations to record the financing costs. The market interest rate for borrowing on the capital market serves as a guide for determining the amount of this interest rate.

internal financing

Internal financing offers further financing options. Here, the company generates capital from its own resources. On the one hand through profit financing, in which the profits are not distributed but remain in the company. On the other hand, for example, via depreciation financing. Depreciation financing is another form of internal financing. How does this work? When using fixed assets (machines, buildings, vehicle fleet, etc.), the asset item is written down. This reduction in value can be deducted from the profit as a valuation variable and set aside tax-free for future purchases of investments.

inventory

Inventory is the process of taking stock of all assets and liabilities of a company in terms of quantity and value on a specific date. An inventory can be used as a physical inventory (in the sense of the quantitative recording of all physical assets with subsequent valuation in [GE]) and as a so-called book inventory (recording of non-physical assets such as receivables, bank balances and the like as well as debts on the basis of receipts and others recordings) are carried out. It is understandable that inventories have to be carried out in particular in preparation for the so-called annual financial statements. The inventory procedures applicable here are regulated by statutory provisions.

Inventory metrics

Investment coverage Investment coverage II Investment intensity

Inventory metrics

Investment coverage Investment coverage II Investment intensity

investment

Investment is the expenditure of financial resources for the purpose of building, maintaining and expanding the 'production apparatus' of a company. Important features of an investment are: An investment always starts with a "payout" of (financial and other) resources. The spent (financial) funds are then - for a longer period of time - tied up in the capital goods. The "payment" for an investment is made in order to derive future benefit from the investment. There is usually a long period of time between the point at which the investment is made and the point at which a (first) benefit from the investment becomes apparent. This fact and the uncertainties that are always present in economic life (in terms of expenses and income) mean that that an investment is always associated with a more or less high risk. Investments can be systematized according to object-related investments (such as tangible investments, financial investments and intangible investments) and according to effect-related investments (such as start-up and expansion investments as well as replacement investments). Investments lead to effects on the assets of the company (assets side of the balance sheet) and are an expression of the use of funds. Its antithesis is financing as a clarification of the source of funds (passive side of the balance sheet). Financial investments and intangible investments) and systematize them according to impact-related investments (such as start-up and expansion investments as well as replacement investments). Investments lead to effects on the assets of the company (assets side of the balance sheet) and are an expression of the use of funds. Its antithesis is financing as a clarification of the source of funds (passive side of the balance sheet). Financial investments and intangible investments) and systematize them according to impact-related investments (such as start-up and expansion investments as well as replacement investments). Investments lead to effects on the assets of the company (assets side of the balance sheet) and are an expression of the use of funds. Its antithesis is financing as a clarification of the source of funds (passive side of the balance sheet).

investment calculation

Investment accounting is the use of business and financial mathematical formulas and calculation rules with the aim of determining the profitability of an investment as an individual investment or in the context of choosing between several variants of the realization of an investment or in the context of investment controlling. A distinction is made between methods of static investment calculation and methods of dynamic investment calculation. The methods of static investment calculation include above all the cost comparison method, the profit comparison method, the profitability comparison method and the amortization comparison method. Characteristic of the static investment calculation is the reference to a single accounting period (e.g. a fiscal year), the non-consideration of interdependencies between the influencing variables and the exclusive use of costs and revenues as calculation variables. The methods of dynamic investment calculation include above all the capital value method, the internal rate of return method and the annuity method. A characteristic of the dynamic investment appraisal is that it considers several periods of use and records the period-related values of the incoming payments/receipts and the outgoing payments/expenditures. They also use the financial mathematical methods of discounting future values to the then comparable present value. The methods of dynamic investment calculation include above all the capital value method, the internal rate of return method and the annuity method. A characteristic of the dynamic investment appraisal is that it considers several periods of use and records the period-related values of the incoming payments/receipts and the outgoing payments/expenditures. They also use the financial mathematical methods of discounting future values to the then comparable present value. The methods of dynamic investment calculation include above all the capital value method, the internal rate of return method and the annuity method. A characteristic of the dynamic investment appraisal is that it considers several periods of use and records the period-related values of the incoming payments/receipts and the outgoing payments/expenditures. They also use the financial mathematical methods of discounting future values to the then comparable present value.

J

joint venture

A joint venture is a joint venture as a form of economic cooperation between one or more domestic companies and one or more foreign partners in such a way that a new, legally independent company is jointly founded or acquired by these partners with the aim of doing business together to carry out the interests of the company.

K

Key figure equity ratio

The equity ratio shows the ratio of equity to the total capital of a company. Significance of the key figure for the company The higher the equity ratio, the more creditworthy and independent the company is from borrowed funds and external influences (financial independence). This also makes the company more competitive and therefore more flexible on the market. A company's equity base plays a major role in banks' credit ratings. The lower the equity ratio, the more risky a company works. The lower the EK quota, the lower the degree of self-determination of a company. Practical considerations for changing the EKQ: The equity share has increased: • Higher profits were achieved • Distributions may have been reduced • New shareholders were taken on who brought in shares. • Shares returned The equity share has reduced: • A shareholder had to be paid out • Excessive private withdrawals • Poor margins led to higher borrowing If the equity ratio is too low or there is a sharp drop in equity, the following measures can be taken: • Contributions from private assets • Reduction of private assets; these should be lower than the profit • Admission of a shareholder • Reduction of excessive material stocks, too high fixed assets, too high customer claims and through the inflow of money, reduction of borrowed capital • Shares returned The equity share has reduced: • A shareholder had to be paid out • Excessive private withdrawals • Poor margins led to higher borrowing If the equity ratio is too low or there is a sharp drop in equity, the following measures can be taken: • Contributions from private assets • Reduction of personal wealth; these should be lower than the profit • Admission of a shareholder • Reduction of excessive material stocks, too high fixed assets, too high customer claims and through the inflow of money, reduction of borrowed capital • Shares returned The equity share has reduced: • A shareholder had to be paid out • Excessive private withdrawals • Poor margins led to higher borrowing If the equity ratio is too low or there is a sharp drop in equity, the following measures can be taken: • Contributions from private assets • Reduction of personal assets; these should be lower than the profit • Admission of a shareholder • Reduction of excessive material stocks, too high fixed assets, too high customer claims and through the inflow of money, reduction of borrowed capital in the event of a sharp drop in equity, the following measures can be taken: • deposits from private assets • reduction of private assets; these should be lower than the profit • Admission of a shareholder • Reduction of excessive material stocks, too high fixed assets, too high customer claims and through the inflow of money, reduction of borrowed capital in the event of a sharp drop in equity, the following measures can be taken: • deposits from private assets • reduction of private assets; these should be lower than the profit • Admission of a shareholder • Reduction of excessive material stocks, too high fixed assets, too high customer claims and through the inflow of money, reduction of borrowed capital

Key figure investment coverage 1

Fixed asset coverage shows how fixed assets were covered by capital. In terms of maturities, it makes sense to finance assets with matching maturities. This is referred to as the so-called golden rule of financing: Long-term assets must be financed over the long term, while short-term capital can be financed over the short term. Fixed asset coverage I shows the extent to which fixed assets are financed by equity.

Key figure investment coverage 2

Fixed asset coverage II states the percentage of fixed assets that are financed by equity and long-term debt.

Key figures business

Business key figures are absolute and relative values that reflect relevant business facts and circumstances in the company process in a concise, concise form in the unit of quality and quantity. Key figures are to be regarded as a unit of measured value and the associated measure. In their entirety and in their interconnection, key business figures form the basis of controlling and the core of the company's management information system. As actual values, they are primarily used to control and analyze current and completed processes, as target values - eg as budgets - on the other hand, to set targets and to control company activities based on them. Business indicators should describe the relevant facts and relationships truthfully, properly, up-to-date (without delay) and transparently. They should also be determined in such a way that cause-effect relationships in the past, present and future become clear and are ultimately suitable for corporate management purposes. Working with business key figures requires access to a corresponding database that supplies the current output data for determining the key figures.

L

late payment

A delay in payment occurs if the debtor culpably fails to pay the agreed consideration for the purchase of a good or fails to do so by the agreed date. If the due date of the payment is determined according to the calendar (with a date), then the debtor is in default without a reminder if the date is exceeded (due date). Example of such a request for payment: Payable no later than June 30, xxxx. If the due date of the payment is not determined according to the calendar, but only by specifying a period of time, then the debtor is only in default after a reminder. Example of such a request for payment: Payable 14 days after receipt of the delivery. In the event of a delay in payment, the creditor has the following rights: He insists on the fulfillment of the contract, i.e. on payment for the goods (possibly dunning fees will be charged). He insists on the fulfillment of the contract and also demands compensation (default interest). After a reasonable period of time and after announcing the withdrawal from the contract, he actually withdraws from the contract and also takes back the goods in question because payment from the customer is not to be expected. He can also demand compensation for non-fulfilment of the contract.

leasing

Leasing means the purchase and temporary use of a (leasing) good on the basis of a leasing contract between a lessor and a lessee and the like, but also fixed assets such as storage rooms, offices and the like. Both the manufacturers of the leased goods and special leasing companies appear as lessors. Lessees are companies that - for a limited period of time - need certain operating resources to carry out their sales process and, after thorough assessment and calculation, see advantages in purchasing these goods on a leasing basis. What can - from the lessee's point of view - be advantages in the leasing business? There is a possibility Acquiring resources that are expected to be needed only for a limited time in the business process. There is - to a limited extent - the possibility of acquiring operating resources even if no own funds are available or - because the fault limit has been reached - no sufficient other external funds are available. A decisive advantage of leasing is that the latest technical equipment can always be purchased for use in the company process. However, the implementation of this aspect requires a corresponding limitation of the basic rental period, a concern that usually leads to higher leasing rates. Leasing installments are tax deductible as business expenses. However, these advantages are offset by the disadvantage that leasing is 'expensive':

leasing

Leasing is an interesting financing alternative and a way to protect your liquidity. When leasing, fixed assets, e.g. B. rented machines, cars, computers, with the option - but not the obligation - to acquire ownership later. Leasing offers the opportunity to finance investments without using equity. Therefore, the credit lines for external financing remain intact, loan collateral and loan-to-value limits remain unaffected. However, leasing leads to an increase in fixed costs and reduces the flexibility of the company due to the contractual obligation. In particular for goods that are subject to a short life cycle (e.g. in computers), a contract that is too long can be problematic. Leasing contracts are often very complex and can contain hidden cost items.

Leasing or buying : checklist

In many cases, leasing is the better alternative to purchasing an asset. Do you know exactly what to look out for when concluding a leasing contract? Is the leased item precisely described? What would the price be if you bought the property? Are discounts passed on or taken into account in the calculation? How high is the special leasing payment? How many installments do I have to pay? what is the rate How long is the term of the contract? How much will the residual value be? Is it a full or partial amortization contract? If the "linearized leasing factor" disclosed (required by the tax office)? Can the contract be terminated? How and under what conditions can I end the contract early? Do I have to buy the object (right to tender)? Can I extend the rental period? What are the renewal rates? Am I involved in the increase or decrease in proceeds, i.e. the higher market value, if the property is sold to a third party after the contract has expired? What costs arise after the leasing contract has expired - for example final payment, transport or dismantling costs?

legal entity

In contrast to natural persons, legal persons are defined associations of persons or pools of assets that represent their own legal personality. Legal entities within the meaning of private law are registered associations, stock corporations, limited liability companies, registered cooperatives and foundations. A legal person has legal capacity from the incorporation to the dissolution of the company. The granting and recognition of the status of legal persons are regulated by laws. Legal persons carry a uniform name under which they can sue and be sued. They are liable for their liabilities with their own assets.

legal form

If you want to work as a self-employed entrepreneur, you have to find a suitable, freely selectable legal form. According to German law, the following are possible: Sole proprietorship: A single person runs a commercial, manufacturing or other commercial business independently, on their own account and under their own name. Partnerships: This includes OHG/general and limited partnerships. Corporations: Corporations include the stock corporation (AG) and the limited liability company (GmbH). Personal liability can be limited with corporations, since the assets of the so-called legal persons are separated from their owners, ie the latter are not liable for the company's debts.

lending rates

Lending rate is the price of lending. The amount of interest on loans depends on the willingness of banks to make loans available. If you want to grant loans, then the interest rates are lower than in the bank's basic attitude of wanting to grant fewer loans. Short-term loans are usually more expensive than long-term loans. Long-term loans tend to be more for fixed assets. This means that the loan is also accompanied by security that can be redeemed if the loan cannot be repaid.

leverage effect

The leverage effect is understood to mean the lever effect that results from the fact that the return on equity ekr [%] can be increased if the company's proportion of external financing increases. The prerequisite for this effect is that the overall return on capital gkr [%] is greater than the interest rate i [%] for raising further outside capital. The leverage effect is based on the following relationships: gkr=((EK*ekr)+(FK*i))/EK+FK resolve to ekr: ekr=gkr + (FK/EK)(gkr-i) : As long as gkr >i, the ekr will increase with increasing FK. It should be noted, however, that the entrepreneurial risk also increases with increasing FK. The basic leverage formula is: where: EK equity [GE] ekr return on equity [%] FK debt [GE] gkr return on total assets [%] i interest rate on debt [%]

liabilities

Liabilities are the equity and debt items shown in the balance sheet, as well as deferred income, which are subject to passivation in accordance with the applicable commercial and tax law regulations. The liabilities provide information about where the funds came from, which are shown as assets (and prepaid expenses) on the assets side of the balance sheet and who has a legal claim to these assets to what extent. According to § 266 HGB, the classification principle for liabilities is increasing maturities: The equity items are then listed first, because the funds that flow from them should be available to the company process on a permanent basis.

LIFO

The LIFO method is a method of valuing inventories that is frequently used when preparing annual accounts (see inventories). This procedure assumes that the assets from the most recent deliveries were used up or sold first. Hence the name 'Last - In - First - Out'.

liquid funds

The liquid funds of a company are the parts of the company's assets that are 'liquid' as cash in the form of cash on hand or as book money (in the form of credit balances on postal giro accounts or as bank balances at banks) and are used to settle the liabilities due at the time can become. The ratio of liquid funds to short-term liabilities characterizes the cash liquidity (as the 1st degree of liquidity) - based on the reporting date.

liquidity

Liquidity is the ability of companies to be able to meet the (short-term or long-term) payment obligations that are due on the given date without restriction at any time. The lack of solvency, also referred to as illiquidity, is a condition in which the company is unable or no longer able to meet its payment obligations on time due to a lack of funds. Illiquidity is a situation that usually results in the initiation of bankruptcy proceedings.

liquidity

As part of the financing, constant liquidity must be secured. Securing liquidity can be seen as a strict secondary condition of the pursuit of profitability. The concept of liquidity Liquidity represents the solvency of companies. Solvency means that every liability can be paid at the right time.

Liquidity (related to sales)

The sales-related liquidity is the 3rd degree of liquidity. In addition to the liquid funds and receivables, inventories (stocks of raw materials, inventories of unfinished products, inventories of goods and finished products) are also included in its determination. A size of approx. 200% applies as a guideline due to the longer period during which it can be liquidated.

Liquidity plan financial plan

The liquidity plan or financial plan serves to maintain liquidity (solvency). The more precisely a financial plan is drawn up, the higher the profit potential of a company. However, an exact forecast of liquidity is not always possible

loan

A loan is defined as any supply of financial resources by external investors that is associated with the following regulations (agreements): the term of the loan (until full repayment) is four years or more; the repayment of the loan can be agreed in the form of an annuity repayment or in the form of installment repayment; the interest to be paid (as the 'price' for the loan granted) can be agreed at a fixed interest rate - based on the remaining debt - or updated through interest rate escalation clauses (with adjustment to the market interest rate). Additional components can be added to these basic characteristics of loan financing. Examples: A so-called disagio (= damnum) is applied, i.e. the borrower is paid an amount which corresponds to the loan amount reduced by the amount of the damnum. The original loan amount is to be repaid. Repayment-free years are agreed, i.e. during this period the capital service (repayment installment + interest) consists 'only' of the payment of interest. Whenever possible, property liens (with registration of land charges or mortgages) or corresponding guarantees serve as security.

loan

M

management report

The management report is the separate document that contains descriptions of the course of business and the economic situation of the company in question in the reporting year as well as the further development of the company in the future. The management report is not part of the annual financial statements, but is required by law for certain individual companies such as corporations and for groups (cf. § 289 and § 315 HGB - Germany). Essential content of a management report: Presentation of the course of business and the situation of the company (development of incoming orders and sales; level of employment, financing of the company, personnel development, rationalization measures, market position of the company, liquidity and equity capital, profitability, etc

market

As is well known, we understand the market to be an economic place where suppliers and buyers meet in order to shape exchange relationships (transactions). Products and services are exchanged for means of payment, voluntarily. The exchange comes about when both partners expect a benefit from this exchange. The price of the good or service is the central benchmark for the benefit assessment.

market economy social

The social market economy is based on a market economy and is characterized by the right to ownership of the means of production, freedom of trade and contract, free pricing, decentralized economic management and dynamic competition on the one hand and social balance and the guarantee of social security and the desired social justice.

market forms

Market forms are the types of markets that differ in the number of market participants on the supply and demand side. Typical market constellations exist in these markets, which are particularly evident with regard to the possibilities of influencing pricing.

market potential

In terms of quantity or money, the market potential captures the (estimated) potential absorption capacity of a defined market (as a unit of 'region' and 'target group') for a specific good, assuming that all conceivable buyers have a specific purchasing power and are also interested in acquiring the goods in question.

market price equilibrium

Market price equilibrium is understood as the result of pricing in a polypoly market with perfect competition, in the sense that when the market price develops, the buyers are still willing to demand a quantity xN,GI of a homogeneous good and the suppliers of this good are still willing are willing to offer the set xA,GI. In other words: At the equilibrium price PGl, the market is "cleared" both on the supply side (with the quantity xA,GI) and on the demand side (with the quantity xN,GI). However, it should be noted that the model assumptions for such a perfect market are unrealistic, so that the development of a market price equilibrium is only of theoretical importance in terms of illustrating the price mechanism in polypolistic markets.

market segmentation

Market segmentation means the division of an overall market into definable and, as far as possible, homogeneous sub-markets with a consistent focus on defined target groups. Such a market segmentation can be carried out according to various criteria, whereby in practice geographic (eg large cities, administrative districts) and demographic aspects (eg sex, age, profession, income) predominate in the segmentation.

market volume

The key figure market volume indicates which sales volume or value of a certain good in a defined market was actually converted in a period or can be converted as a forecast value. If only the sales volume of a specific company is considered in this context, this leads to the key figure sales or sales volume.

marketing

Marketing is a customer and market-oriented way of thinking and behaving that permeates all areas of the company and is aimed at influencing and shaping the market through the planned and coordinated use of marketing policy instruments.

Marketing - controlling

The task of marketing controlling is to support targeted, market and customer-oriented corporate management. The focus is on: - Provision of information for long-term strategic and operative sales, assortment, product and price planning in the company (marketing information system) - Development and expansion of the marketing planning system (with strategy formation, action planning, budgeting, etc.) - Monitoring and control of sales and success indicators according to product groups, sales areas, customer groups and sales periods (marketing control system) - Evaluation of the company's marketing organization (structure and process organization in the company's marketing area) - Evaluation of the use of online marketing systems ( e-mail, Internet) in the company's marketing concept.

Marketing mix

All means and measures that are suitable for actively influencing the sales market, winning customers and retaining customers through satisfaction with the service offered come into consideration as marketing instruments. This includes measures - the product and assortment policy - the price and conditions policy - the distribution policy and - the communication policy. The market-specific and product-related combination of elements of these strategies is called the marketing mix.

marketing mix

The marketing mix is the market and target group-specific combination of marketing instruments.

Merchant

In economic life, a businessman is anyone who runs a business of a commercial nature and is therefore obliged under commercial law (see §1 HGB) to enter this business in the commercial register (exception: small businesses). Any self-employed activity geared towards long-term income counts as a trade. This activity is usually geared towards making a profit, but this is not a mandatory feature of a trade. It is sufficient if this economic activity, which is designed to last, enables acquisition through sales transactions. The obligation to keep commercial accounts arises from the entry in the commercial register.

monetary policy

Monetary policy is a functional part of economic policy. Since January 1st, 1999, the European Central Bank (ECB) has been solely responsible for the monetary and foreign exchange policy of the European Monetary Union (EMU). The European Central Bank and the European System of Central Banks (ESCB) are independent in their actions and decisions from the instructions of the national governments and the organs at EU level. The ECB has the sole right to authorize the issuance of banknotes within EMU member countries. The issuance of euro coins is managed by the EMU member countries, but the extent of the issuance is subject to approval by the ECB.

money

Money (as used here) is the legal tender prescribed by the state and a generally accepted medium of exchange. As we know, money plays a central role in the market economy. It has to fulfill the following functions: Money is a generally recognized means of exchange on markets. Money is the reference value for prices and thus means of calculation. After all, money is a store of value in that the purchasing power contained in money is preserved and later used again.

monopoly

The market form that has only one supplier or only one customer (supply or demand monopoly) is called a monopoly. This provider is called a monopolist. As a supplier, a monopolist can influence both the price and the quantity in such a way that maximum sales are achieved with a corresponding monopoly profit. In addition to the pure monopoly, the bilateral monopoly (one supplier and one customer) and the state monopoly (example: monopoly on issuing means of payment) are also of interest.

monopoly supply monopoly

A supplier has the position of a supply monopoly if he can assume that his sales are only determined by the behavior of the buyer and by his own pricing policy, but not by the market-related effect of competitors.

mortgage

A mortgage is a lien on property that entitles a creditor to satisfy a specific claim on the property encumbered with this mortgage. In contrast to the land charge, a characteristic of the mortgage is that there is a legally effective claim, so that the mortgage cannot be transferred without this claim. A mortgage is entered in the land register.

N

nature of expense method

The nature of expense method is one of the two basic methods of determining success according to commercial law regulations (Germany: § 275 HGB; Austria: § 231 - HGB; Switzerland: OR 663). The nature of expense method captures the entire expense of an accounting period, regardless of whether the goods produced in this period are also sold (sold) or not. This method is therefore also called the production cost method. The changes in inventories of finished goods and work in progress and own work are included as correction items to ensure the comparison with the cost of sales method. In the breakdown of the expense types, the nature of expense method follows the correspondence to the performance factors (as input variables in the operational performance process).

net income

The annual surplus is the (positive) commercial success of a company, which is determined according to the applicable commercial law provisions for the income statement (according to the nature of expense method or cost of sales method) for a past financial year as profit after taxes. The net profit is the starting point for determining the balance sheet profit and the subject of decisions on the appropriation of profit. If this period result is negative (less than zero), then it is referred to as the annual deficit

O

OHG

The open commercial company (OHG) is a contractual association of two or more people whose purpose is to operate a commercial enterprise (commercial trade) under a joint company name and with unlimited liability of all partners. The general partnership is a partnership. The company managed by the OHG contains the names of several shareholders or the name of a shareholder with a corresponding addition such as "& Sohn" or "& Co" or "OHG" or a material or fantasy name with the addition OHG. The unlimited liability of all partners applies, possibly also including private assets.

one-man business

A sole proprietorship is a business run by one person, the sole proprietor. The sole proprietor raises the equity required for his company and is solely and unrestrictedly liable for the liabilities of his company, possibly also including his private assets. The sole proprietorship runs a company that includes the surname of the entrepreneur with at least one full first name. After the amendment of the commercial law on merchant status, from July 1, 1998, product designations or fancy names can also be used. It is possible to set up a sole proprietorship in Germany without any major formalities. To be done are: registration at the trade office, registration at the tax office, setting up a business account at a bank, etc Depending on the object and scope of the trade, however, an entry in the commercial register must be made. The sole proprietorship form is primarily chosen as the legal structure for starting self-employment. A private company can also hide behind a sole proprietorship.

Opportunity costs

Opportunity costs are understood to be the loss of utility valued in money, which arises from the fact that - due to limited resources - one decides not to purchase good Y but to purchase good X. Example: An entrepreneur is faced with the decision to use the available investment funds of 50,000 GE either to purchase a transport (Alternative A) or to purchase a warehouse (Alternative B) or to purchase a new computer system (Alternative C). to use. If he decides in favor of alternative A (transporter, good A), he must forego both the acquisition of the warehouse (good B) and the acquisition of the new computer system (good C), i.e. good A "costs" the Waiver of good B or good C.

organizational structure

Organizational structure is the planning and implementation of the static structuring of the task hierarchy in a facility (company, operation, administration) and thus the regulation of subordination and the clarification of the powers of the individual management positions (= instances) and the other organizational units. The result of the organizational structure is a structure plan, which is referred to as an organizational chart and whose bottom position is the position. The design of the organizational structure includes stipulations on the centralization or decentralization of tasks, on the right to issue instructions and on the principles of interaction between the individual positions or structural units in carrying out the tasks of the organizational unit as a whole.

organizational structure

outside financing

External financing considers capital that is brought into the company from the outside.

outside financing

External financing considers capital that is brought into the company from the outside.

overheads

Overheads are understood to mean all costs that are to be charged indirectly in a company. These costs can only be allocated to individual cost centers or cost objects with the help of relationship values (surcharge bases, keys and the like).

P

payer

Within the framework of cost and performance accounting, the products or services created in the company to which costs can be allocated based on causation are regarded as cost units. In the business process based on the division of labour, these can be both intermediate products (= intermediate cost bearer) or finished products or services intended for sale (= final cost bearer).

portfolio analysis

The portfolio analysis is an instrument of strategic corporate planning and control. It is primarily used for the analysis and evaluation of facts that are in a qualitative and - whenever possible - also in a quantitatively determinable connection, i.e. "Fact 1 is functionally related to fact 2" (see our example of the risk-return portfolios.

power

Performance is the monetary expression of the period-related output of earnings from the process of operational performance. It includes the operating performance and the imputed performance of the period. The determination of the (overall) performance is the concern of determining success according to the nature of expense method as well as the task of cost and performance accounting (as part of the determination of the operating result). The determination of the performance also serves to check the economic efficiency of the operating process. The total performance of a period is made up as follows: Sales performance (= turnover of the period) as the value of the earnings already sold and thus converted, regardless of whether they have already been paid in this period or are still open as receivables (from goods and services); Inventory performance as a monetary expression of changes in inventories of finished goods and work in progress; Own work as a monetary expression of the goods completed in the relevant period that are intended for use in the company and are therefore not up for sale; Imputed performance as a monetary expression of the production of goods, which is not equal in earnings and is made up of an alternative service and an additional service. Important: The goods of the sales performance are valued at sales prices, while the inventory performance and own work are valued at production costs. Imputed performance as a monetary expression of the production of goods, which is not equal in earnings and is made up of an alternative service and an additional service. Important: The goods of the sales performance are valued at sales prices, while the inventory performance and own work are valued at production costs. Imputed performance as a monetary expression of the production of goods, which is not equal in earnings and is made up of an alternative service and an additional service. Important: The goods of the sales performance are valued at sales prices, while the inventory performance and own work are valued at production costs.

power factor

The performance factor results from the cycle time and the efficiency and is therefore “a control measure for losses due to deviations from the planned piece time and idle times.

prepaid expenses

Prepaid expenses are the items in a balance sheet that are determined and evaluated for certain payment transactions for the purpose of determining the economic success of a company for a closed financial year on an accrual basis. A distinction is made between active and passive prepaid expenses. Prepaid expenses include payments that were made before the balance sheet date but are economically based on events in the following financial year (e.g. advance payment of rent for commercial premises, advance payment of insurance premiums, etc.). The abstract countervalue of the payments that have increased the stock of liquid funds before the closing date is reported as passive accruals and deferrals,

Price

In the economic sense, price is the monetary expression for the value of a good. The price is the consideration that a buyer is supposed to pay or actually pays for a good or a service to the seller of the good or the provider of the service. The price is usually created through an offer and acceptance of the offer as part of a purchase transaction, but can also be the result of government price fixing. Pricing is defined as a) the formation of prices for goods and services that are traded on markets, on which the respective market form (monopoly, oligopoly, polypoly) has a significant influence, or b) the decision on the level of the price and possible Discounts as part of the company's marketing strategy towards customers. See also: Price Elasticity of Demand.

price elasticity of demand

The price elasticity of demand provides indications of what (relative) quantitative change in demand is to be expected if the price of the good in question increases or decreases by a certain amount. % Quantity Demand Change/% Price Change: can range from -1 to +1.

Price Response Function

A price-response function describes the price-quantity combinations at which a supplier can sell his goods.

process organization

Process organization is to be understood as the planning and implementation of a spatial-temporal structuring as well as an appropriate regulation of competences for the perception and fulfillment of repetitive tasks in the execution of the functions of a company. The special focus is on the workplace-related work design with the purposeful tasks to be carried out on a work object while guaranteeing the unity of long-term durability (stability) and situation-related adaptability (flexibility) of the relevant process organizational regulations.

process organization

Product Life Cycle Analysis

The product life cycle is the 'life cycle' of a good in the period of time from its market launch to when the good is withdrawn from the market, measured in terms of turnover and profit or loss.

production factor (Economics)

Factors of production are the goods that are used in the production process and combined with one another in such a way that other goods are created from them, which are either used directly for consumption or go back into a production process as a production factor.

productivity

Like all other key figures, the productivity key figures result from a calculation in which quantities are set in relation to one another. But more often than with other key figures in business administration, productivity key figures, auxiliary key figures, i.e. partial productivities are used or dividends and divisors are exchanged or rotated for better information or interpretation.

Profit

Profit (G) is the difference between sales (U) and costs (K): G=UK In the income statement, profit is referred to as the operating result. This profit figure characterizes the period success in the actual operating process. Earnings before taxes = Amount of earnings before deducting any taxes to be paid. Net income is the determined profit for a year. Profit = balance sheet profit

Profit and Loss Account

The profit and loss account is the name of the period-related income statement for determining the "annual surplus" or "annual deficit" (see § 275 HGB - Germany; § 231 - HGB - Austria; OR 663 - Switzerland). The income statement is part of the annual financial statements and can be carried out using two methods: the nature of expense method and the cost of sales method. According to US GAAP, a profit and loss account is only permitted according to the cost of sales method, while the International Accounting Standards (IAS) allow a profit and loss account according to both the nature of expense method and the cost of sales method.

profit carried forward

Profits are carried forward when the general meeting of the company's shareholders decides not to distribute part of the annual profit (after taxes) but to carry it forward to the following financial year. This will strengthen the company's equity base. The retained earnings are shown as a sub-item of equity on the liabilities side of the balance sheet. The assets corresponding to the amount of profit carried forward (on the assets side of the balance sheet) are usually liquid funds.

profitability

Profitability is to be understood as the "profitability" of input factors in the business process. Measured expression of profitability are key figures in which the numerator always contains the profit G [GE] and the denominator the respective input factor, for example the capital employed K [GE]. Common profitability metrics are return on equity, return on total assets, also known as "return on investment" (ROI), and return on sales.

profitability equity

The return on equity shows the return on equity employed. It is calculated by dividing the profit achieved in a period by the equity employed. This amount is multiplied by 100 to show a percentage. EKR = (Profit / Equity) * 100%

profitability sales

Profitability on sales = (profit / sales) * 100% The key figure provides information on how much profit the company has made in relation to 1 monetary unit (e.g. $ or Euro or CHF or...) sales. Increasing return on sales, with prices remaining the same, can indicate an increase in productivity.

profitability types

Types of profitability Return on total assets Return on equity Return on debt Return on investment Return on sales

public company

The stock corporation (AG) is a capital-based corporation. As a rule, it pursues economic purposes and therefore runs a commercial enterprise for whose liabilities only the company's assets are liable. The company has a fixed share capital (share capital) divided into partial amounts (= shares). The AG is a separate legal personality (= legal person).

public company

Q

quality management

Quality management is the company-wide planning, organization, management and control of all product, process and personal measures to achieve and ensure defined quality goals and standards. In this context, "company-wide" means that quality management must cover - all phases in the product life cycle of an asset, - all areas of responsibility in the company and - all interactions of the company with its relevant environment.

R

rating

A rating is a risk assessment that is primarily used to assess creditworthiness. A distinction is made between so-called external and internal ratings. External ratings come from rating agencies (S&P, Moodys, Fitch and others). Internal ratings are risk assessments that banks carry out themselves. Security is of particular importance in lending. Safe projects are more likely to be financed, and therefore more cheaply, than unsafe projects. This is also due to the fact that banks are obliged to make higher security reserves for rather risky lending than is the case for low-risk lending. The basis for the assessment of credit risk are so-called ratings (risk assessment). There are rating categorizations of eg AAA - CCC. AAA would be a particularly positive and therefore low-risk lending project or borrower. CCC, on the other hand, is particularly risky. Loan interest rates vary depending on the risk classification. The result of the interest rate determination from the best to the worst rating can make a difference of a few percentage points in the lending rate. Risk-relevant factors in the rating include, for example, the market position of the borrower, its turnover, returns, regulations for the failure of management, successor regulations and much more. A rating can contain around 180 questions that lead to good or low creditworthiness. Risk-relevant factors in the rating include, for example, the market position of the borrower, its turnover, returns, regulations for the failure of management, successor regulations and much more. A rating can contain around 180 questions that lead to good or low creditworthiness. Risk-relevant factors in the rating include, for example, the market position of the borrower, its turnover, returns, regulations for the failure of management, successor regulations and much more. A rating can contain around 180 questions that lead to good or low creditworthiness.

rating

Rating is - generally speaking - the evaluation of a product or an organization, combined with a classification, to which the assignment of a censorship is linked. The credit rating as a credit assessment procedure aims to make a statement about the probability with which a borrower will pay his rated liabilities in full and on time or the probability of disruptions in the repayment of a loan. The assessment of the creditworthiness of the loan applicant or the borrower is reflected in an internationally accepted notation with a defined interpretation (rating scaling).

Ratio debt ratio

This key figure provides information about the extent to which the company works with borrowed capital and how high the company's level of debt is. FKQ = (FK / GK) * 100% Significance of the key figure for the company The higher the proportion of borrowed capital, the less willing banks are to grant loans. Practical considerations for changing the FKQ The debt ratio has decreased: • Earned profits have not been distributed • Capital has increased • Reserves have been increased The debt ratio has increased: • Profits have deteriorated • Private withdrawals have increased • Purchase prices have increased

repayment

Repayment is a repayment of a liability agreed under intellectual property law, e.g. B. a loan, in one or more amounts (= repayment installments) within a period agreed between the contracting parties (= repayment period). When taking out a loan, the repayment can be agreed as an annuity or as an installment.

requirements

A claim is - in the legal sense - the right of a creditor against a debtor to the fulfillment of an agreed service. In the business management framework for action, claims are claims for cash payments based on deliveries and services, bank deposits, participation rights, etc. Claims are part of the monetary current assets and are therefore shown on the assets side of the balance sheet. Receivables are valued at face value. If a lower value is to be assigned for certain receivables on the balance sheet date in order to comply with the lower of cost or market principle, an adjustment must be made as an individual or general value adjustment.

Reserves silent

Hidden reserves (= hidden reserves) are the abstract equivalent value of asset components that cannot be seen from the balance sheet data in the annual financial statements. Hidden reserves arise as a result of accounting and valuation acts in which the positive difference between the current value and the book value (in the balance sheet) on the balance sheet date is not made apparent for certain items of fixed or current assets, e.g. B. by undervaluing assets, by overvaluing debts, by not capitalizing assets and the like. In this way, reserves are created for the company's self-financing as a precaution for "if-cases".

retained earnings

Retained earnings are a sub-item of equity and are therefore reported on the liability side of the balance sheet. Their formation presupposes that an annual profit (after taxes) was generated in the past or in previous financial years. The assets corresponding to the amount of retained earnings (on the assets side) are usually in liquid form. The formation of legal revenue reserves is only possible for stock corporations and corresponding mixed forms such as 'limited partnership on a stock basis'. In addition, in stock corporations, as in other legal forms of companies, statutory reserves can be formed in such a way that, according to the articles of association, parts of the annual profit are earmarked or freely allocated to the reserve. The withdrawal from revenue reserves (and their classification in the determination of the balance sheet profit of the past financial year) is to be shown in the notes to the annual financial statements. Retained earnings are reserves that can be used to self-finance business processes.

return on equity

The key figure return on equity indicates how high the 'profitability' of the average equity employed is in an accounting period T: The meanings are: ekr = return on equity [%] G = profit [GE/a] ØEK = average equity employed [GE/a] This The key figure is primarily used to assess success within the framework of the balance sheet and profit and loss analysis. In order to ensure the necessary period or company comparison, "profit before tax" or "adjusted profit" is usually used as "profit". If one sets the calculated return on equity ekr [%] in relation to the standard interest rate zs [%] for long-term invested funds,

return on equity

Return on investment ROI

The return on investment shows the profitability of an investment. It is determined by determining a profit through the total capital employed. ROI = (profit / total capital or invested capital) * 100% The same result is obtained if the return on sales is multiplied by the capital turnover. Return on Sales = (Profit / Sales) * 100% Turnover = Sales / Total Capital Internal Note: The insight from ROI = Return on Sales * Turnover is that an investment can be optimized by either increasing the earnings per monetary unit employed or attempting the process of to accelerate sales.

risk analysis

Risk analyzes are procedures and procedures - identifying risks (according to risk types) as part of the planning of projects and as part of early warning systems, - evaluating the probability of risks occurring in a defined forecast period or in relation to a specific project, and - the Determination of possible causes and probable effects/consequences of the identified and assessable risks. The task and goal of risk analyzes is to - develop decision proposals for risk prevention, avoidance, reduction or transfer and to create the basis for - effective risk management and control as part of the risk management of the institution concerned. Risk analyzes are also an integral part of the rating of institutions in the context of credit checks.

S

sales profitability

The key figure return on sales ur indicates how much GE profit - on average - is achieved or generated per 100 GE sales revenues

scenario technique

The instrument of strategic controlling is referred to as scenario technique, which - above all in the context of strategic corporate planning - is oriented towards the development of alternative scenarios. The following work steps have to be carried out: Task analysis In this work step, the object of investigation (development of the company as a whole; development of a strategic business unit or perspective of a product group) is analyzed in its current situation. This requires defining the goals and the strategies (to achieve the goals), analyzing the current strengths and weaknesses, and defining the task and the time horizon for the development of scenarios. Impact analysis The second step is to to fix and analyze the external spheres of influence that stand in the context of the object of investigation (e.g. markets, competition, economic policy framework conditions, etc.). An important result of this work step must be to determine the networking (mutual influence of the factors) and to represent it in a networking matrix (grid). Trend projections The aim and concern of the work in the third step is for those in step b. to determine parameters (so-called descriptors) determined from the influencing variables that allow the current and possible future states for these influencing variables to be fixed and corresponding trend projections to be carried out (e.g. market development in the respective product group). This is to be done in the context of the task (first step) and the goals and strategies formulated here. Fault analysis Parallel to or subsequent to the sixth work step, a fault analysis must be carried out in order to identify possible external or internal situations and developments in good time, which can have a negative or positive impact on the visions of the future that have been drawn up. From this, conclusions for reactive or preventive measures can be derived, which serve to secure the strategic goals. Implementation of the selected scenario (scenario transfer) The task and concern of the eighth work step is to formulate a sufficiently complex and well-founded guiding strategy on the basis of the results of the sixth and seventh work steps, which can flow into the strategic corporate planning in order to gradually achieve the strategic goals set at the beginning, taking into account possible environmental developments (implementation of early warning systems). The application of the scenario technique in companies requires the formation of project teams, in whose work both internal and external specialists should be involved.

self-financing

Self-financing is a capital injection by the owners. The capital is therefore available indefinitely. The financiers have a share in both the profits and losses of the company and can influence the fortunes of the company. Investors can bring funds into the company through deposit financing or equity financing. In equity financing, a distinction is made between marketable and non-marketable investments. The equity financing is a securitization of the externally supplied equity, in the form of e.g. B. Equity securities. Shares are typical equity securities.

self-financing

service

A service is understood to be the ability and willingness of an economic entity, the so-called service provider, to carry out an activity in the sense of directly transferring its own performance factors to external factors (customers or customer objects), with the aim of to achieve the desired effects and/or the maintenance of existing conditions from these external factors. The creation and delivery of services takes place immediately ("uno-actu"), so that in this process - in contrast to the creation of material goods - there is never a product that can be stored, stored or transported in the usual sense. Services can be primarily human (e.g. "advice"), but also mechanical (e.g. "washing the car"). in a fully automatic car wash) can be offered and implemented. As a rule, services are carried out as a combination of human activity using technical means, with the personal character of the activity being dominant and decisive for the customer. With the current change from an "industrial society" to a "service society", the economic analysis and evaluation of services is of immense importance. Through the so-called "outsourcing" certain functions, which were previously performed by structural units of a company, are shifted to the outside and corresponding orders are given to specialized companies. This applies to such functions as maintenance cleaning,

service

A share is an indivisible security that certifies the owner's right to a stock corporation as a shareholder, which he has acquired by taking over a share in the company's share capital (= share capital). (1) The shares can be established either as par value shares or as no-par value shares. (2) Par value shares must be denominated in at least one euro (CH: 1 centime). Shares of lesser nominal value are void. The issuers are jointly and severally responsible to the holders for the damage caused by the issue. (3) No-par shares have no nominal value. The no-par value shares of a company participate in the share capital to the same extent. (4) The proportion of the share capital is determined in the case of par-value shares according to the ratio of their nominal amount to the share capital, in the case of no-par shares according to the number of shares.

Shareholder Value

Shareholders are the equity providers of a company. This means above all the shareholders of a company that operates in the legal form of a stock corporation. These shareholders are primarily interested in the stock market price of the shares of this company increasing, because this increases the asset value of the shares as a security, which could be realized as "cash" in a potential sale of the shares in relation to the original new value, and it increases progressively the prospect of a high dividend. In this context, shareholder value is the cash value of the company's discounted future freely available surplus (= cash flow) as an expression of the increase in equity. However, the daily fluctuating stock market prices encourage too much short-term decisions ("buy" or "sell"), which runs counter to the requirements of a long-term strategy for corporate development and the concern of preserving jobs. Therefore, the goal of "increasing shareholder value" cannot be the sole guiding factor for the actions of the management in stock corporations.

Soil (Economics)

Soil is considered to be the production factor that includes all natural resources that can be used in the production process to manufacture goods and thus to cover and satisfy needs. These resources not only affect the soil in the sense of cultivable land in agriculture and forestry, in horticulture, etc., but also mining areas for the extraction of raw materials, as well as air, water, sunlight, vegetation, etc. Since "soil" does not originate from a previous production process, it is also to classify this factor as a "causal", original production factor. Since the scarcity of an economic good influences the price, this explains the gradual rise in prices for raw materials that are becoming scarcer, for land in cities and metropolitan areas.

Soil (Economics)

stakeholders

Stakeholders are understood to be the group of contractual partners who - in addition to the providers of equity (shareholders) and providers of outside capital (bondholders) - also have open claims on the company. These stakeholders primarily include the employees and the customers of the company with regard to salary promises, guarantee announcements and the like.

state quota

The comparison of government expenditure to gross national product is referred to as the government ratio (in percent).

stock market

The stock market is the economic place where stocks are organized and regularly traded, i.e. bought and sold. The stock exchange performs this function.

stock market

The stock market is the economic place where stocks are organized and regularly traded, i.e. bought and sold. The stock exchange performs this function.

straight-line depreciation

The form of depreciation in which the annual depreciation amount Q remains constant is called straight-line depreciation.

straight-line depreciation

The form of depreciation in which the annual depreciation amount Q remains constant is called straight-line depreciation.

SWOT analysis

The strengths-weaknesses analysis is an instrument for uncovering and evaluating strengths and weaknesses according to criteria that are a measure of the existence of a facility (company and the like) in market-based performance and price competition. The assessment of one's own strengths and weaknesses is carried out with reference to the assessment of the fulfillment of the relevant criteria by a market leader or a main competitor or with reference to top values ("benchmarks") of the respective industry. The aim of the strengths-weaknesses analysis is to a) determine for each individual criterion how big the gap to the respective best value is or to what extent this best value is determined by the institution itself and b) measures to overcome a given gap to justify. When determining and evaluating the strengths and weaknesses of the institution, both the company's own managers and external parties (customers, suppliers, the house bank, etc.) must be included. The work process for creating and revising a strengths-weaknesses analysis should always be organized and coordinated by a specialist with controlling knowledge and experience.

T

term of payment

The term of payment is a period that a seller grants the buyer of an asset to settle the agreed invoice price. This creates a debt relationship in the sense of supplier credit. In order to nevertheless achieve a short-term settlement of the invoice amount, the seller will offer the customer a price reduction as a cash discount (within a - short - cash discount period).

Total capital profitability

The total return on capital shows how much interest has been paid on the total capital employed. For this purpose, the profit for the period is added to the expense for interest on borrowed capital (Fki). The sum is divided by the total capital (EK + FK) and multiplied by 100 (to display as a percentage). Total Return on Capital = ((Profit + Fki) / Total Capital) * 100% Internal Note: Please consider why Fki is added to profit.

turnover rate

The turnover time indicates the time in which a certain asset (e.g. the stock of goods) is turned over once in the cycle of the sales process. The turnover time is the reciprocal of the turnover frequency.

U

Unit volume

Sales is to be understood as the overall process of the preparatory and executive activities for the commercial exploitation of the earnings produced by the company on the sales market.

Unit volume

Sales is to be understood as the overall process of the preparatory and executive activities for the commercial exploitation of the earnings produced by the company on the sales market.

unscheduled depreciation

Extraordinary depreciation is required in the event of an exceptional and permanent loss in value of an asset and must be recorded in the accounts like any depreciation.

unscheduled depreciation

Extraordinary depreciation is required in the event of an exceptional and permanent loss in value of an asset and must be recorded in the accounts like any depreciation.

V

value added tax

Sales tax - also known as value added tax - is a transaction tax that taxes the end consumer (= consumer) of goods (goods, services). Sales tax covers over 30% of the total tax revenue in Germany. According to the Sales Tax Act (UStG; BGBl. I, p. 350), precisely described economic processes, which are referred to as taxable sales, are subject to sales tax. This includes: paid deliveries and other services own consumption for tax purposes free deliveries and other services Imports All goods produced by a company in Germany (as goods deliveries or other services), as well as all imports and goods purchased within the European Union for a fee are included and also taxed the company's export consumption. The sales tax is to be determined by the entrepreneur himself and - in connection with the (monthly or quarterly) sales tax advance return and with the annual tax return - paid to the tax office. The following applies: If the determined sales tax - as sales tax liability - is greater than the deductible input tax, then a sales tax liability arises (= sales tax liability). The corresponding amount is to be paid to the responsible tax office as a sales tax advance payment in due time. If, on the other hand, the calculated sales tax - as the sales tax burden - is less than the deductible input tax, then - from the entrepreneur's point of view - there is a sales tax surplus. The corresponding amount will be refunded to the entrepreneur by the tax office after submission of the advance sales tax return.

VAT

Value Added Tax (VAT) is a general consumption tax. There is a basic VAT obligation. Exceptions may be freelance activities. Sometimes there are also different tax rates (e.g. books)

W

work

The production factor work includes the mental and physical activity of humans, which is used to produce goods and thus to cover and satisfy needs. A distinction must be made between a) executive, object-related work in the immediate production process and b) more dispositive (planning, coordinating and controlling) work in controlling the production process.

work

X

XETRA

XETRA stands for the computer trading system of Deutsche Börse AG in Frankfurt/Main, which replaced the technically outdated IBIS system in 1997. Using XETRA, banks and brokers have the opportunity to trade selected stocks, bonds and warrants, regardless of location, without - as with the floor exchange - being present on the premises of the stock exchange and without the intervention of stock exchange traders.

1 2 3 A B C D E F G H I J K L M N O P Q R S T U V W X

IPF - Manager

Glossary

1

1st degree liquidity

2

2nd degree liquidity

3

3rd degree liquidity

A

ABC analysis

ABC analysis

Accounting principle of reverse authoritativeness

Accounting principle of reverse authoritativeness

accounting principles

accounting principles

Acquisition potential

Acquisition potential

amount of money

annuity

annuity

assets

assets

assets

attribution

B

balance sheet

balance sheet

balance sheet analysis

balance sheet analysis

balance sheet extension

balance sheet extension

Balance sheet tax balance sheet

Balance sheet tax balance sheet

bank controlling

bank controlling

Basel II

Basel II

black box

black box

bond

bond

borrowed capital

bull market

business administration

business administration

business process

C

Capital (Economics)

capital turnover

cash flow

cash flow

cash flow statement

cash value

cash value

change

chart of accounts

Cob web theorem

Cob web theorem

commercial register

commercial register

company size

company size

company valuation

Comparative cost advantages

Consumer Goods

contribution margin

contribution margin

Contribution Margin Accounting

Contribution Margin Accounting

contribution margin relative

contribution margin relative

controlling

controlling

controlling concept

controlling concept

Controlling strategic

Controlling strategic

corporation

Cost accounting partial cost accounting

cost and performance calculation