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27 Cards in this Set
- Front
- Back
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Have a maturity of one year or less
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current assets
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Organized from most liquid to least liquid
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fixed assets
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NWC less than 0
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CA less than CL
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NWC greater than 0
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CA greater than CL
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Cash, Marketable Securities, Accounts Receivable, Inventory
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Current Assets
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How easily an asset can be converted into cash without a significant loss in value
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liquidity
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Accounts Payable, Accruals, Notes Payable, Currently Maturing Long-Term Debt
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Current Liabilities
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Preferred Stock, Common Stock, Retained Earnings
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Shareholder's Equity
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Valued at par and capital in excess of par
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common stock
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Balance Sheet Identity
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TA = TL + TE
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historical value when purchased
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book value
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price at which the assets, liabilities, or equity can actually be bought or sold
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market value
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Market value and book value are often very different. Why?
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Market value is what we would get if we sold it
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Valued at par and capital in excess of par
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common stock
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historical value when purchased
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book value
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price at which the assets, liabilities, or equity can actually be bought or sold
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market value
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Market value and book value are often very different. Why?
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Market value is what we would get if we sold it
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Market Value vs. Book Value
Which is more important to the decision-making process? |
Market Value
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The balance sheet provides?
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book values
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snapshot in time
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balance sheet
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S-COGS-D=EBIT-Int. Exp.=EBT-Taxes=NI-Div.=Add'n to RE
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Income Statement
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The only thing about taxes we can rely on is that?
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they will always be changing
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the percentage paid on the next dollar earned
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marginal
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If you are considering a project that will increase the firm's taxable income by $1 million, what tax rate should you use in your analysis?
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34% because they are still in the same tax bracket
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actual movement of cash within the firm
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cash flow
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Cash available for distribution to all of a firm's investors (bondholders/creditors and shareholders) after accounting for funds needed for operations
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free cash flows (non-traditional)
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Operating activities, Investment activities, and Financing activities
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Statement of Cash Flows (traditional)
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