Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
45 Cards in this Set
- Front
- Back
|
Business Finance
|
Study of long-term investments, how to pay for them, and how to manage daily finances.
|
|
|
CFO
|
Top financial officer in the firm.
|
|
|
Treasurer
|
Cash management, capital expenditures.
|
|
|
Capital budgeting
|
Managing the long-term investments.
|
|
|
Capital structure
|
Debt and equity used to finance
|
|
|
Working capital
|
Short-term assets and liabilities.
|
|
|
Working capital management
|
Management of the cash, inventory, and payables.
|
|
|
Sole proprietorship
|
Business owned by a single individual.
|
|
|
Partnership
|
Business owned by 2 or more individuals.
|
|
|
Partnership agreement
|
Documents specifying the distribution of profits and losses among the partners.
|
|
|
Corporation
|
Business entity treated as a legal person.
|
|
|
Articles of incorporation
|
Legal papers which designate a firm's name, nature of business, and intended life.
|
|
|
Bylaws
|
The rules which outline how a corporation will govern itself.
|
|
|
LLC
|
Cross between a partnership & a corporation.
|
|
|
Agency problem
|
Potential conflict between the managers and owners.
|
|
|
Stakeholder
|
Anyone other than the stockholders who have a claim on the cash flows of the firm.
|
|
|
Primary market
|
Original sale of securities by the issuer.
|
|
|
Secondary market
|
Market for trading securities after the original sale.
|
|
|
Public offering
|
Sale of securities to the general public.
|
|
|
Private placement
|
Negotiated sale of securities by an issuer to a specific buyer.
|
|
|
Dealer market
|
Any over-the-counter market.
|
|
|
Auction market
|
Securities market with a physical location that matches buyers with sellers.
|
|
|
Listed
|
When a company qualifies to trade on a particular exchange.
|
|
|
Balance sheet
|
Financial statement that lists a firms value at a particular date.
|
|
|
Current assets
|
Normally converts to cash within one year.
|
|
|
Fixed assets
|
Has a relatively long life.
|
|
|
Tangible assets
|
Fixed asset with a physical existence.
|
|
|
Intangible asset
|
Fixed asset without a physical existence.
|
|
|
Shareholder's equity
|
Residual value of a corporation after all the debts have been paid.
|
|
|
Net working capital
|
Difference between a firm's current assets and its current liabilities.
|
|
|
Liquidity
|
Ease and speed with which an asset converts to cash.
|
|
|
GAAP
|
Common set of procedures and standards for preparing audited financial statements.
|
|
|
Income statement
|
Reflects a firm's performance over a period of time.
|
|
|
Earnings per share
|
Amount of net income attributable to each share of stock.
|
|
|
Noncash items
|
An expense charged against revenues that does not affect the cash flow of a firm
|
|
|
Average tax rate
|
Total tax divided by total taxable income.
|
|
|
Marginal tax rate
|
Amount of tax payable on the next taxable dollar earned.
|
|
|
Operating cash flow
|
The cash generated from a firm's normal business activities.
|
|
|
Cash flow from assets
|
Cash available to distribute to creditors and stockholders.
|
|
|
Net capital spending
|
The amount of a firm's cash flows that are spent on fixed assets.
|
|
|
Free cash flow
|
Another term for cash flow from assets
|
|
|
Cash flow to creditors
|
Interest paid minus net new borrowing.
|
|
|
Cash flow to stockholders
|
Dividends paid minus the net new equity raised.
|
|
|
Example of current asset
|
Inventory
|
|
|
What is true of most fixed assets?
|
The book value decreases over time.
|
