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29 Cards in this Set
- Front
- Back
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Balance Sheet
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Reflectd a firm's accounting value on a particular date
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Current Asset
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Normally converts to cash within a year
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Fixed Assets
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Has a relatively long life
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Tangible Asset
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A fixed asset with physical existence
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Intangible Asset
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Valuable fixed asset that has NO physical existence
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Net Working Capital
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=Current Assets - Current Liabilities
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Income Statement
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Financial statement that reflects a firm's performance over a period of time
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Pure discount
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present value of a single lump sum to be repaid at some time in the future.
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long term liabilities
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debts that are NOT due within 1 year
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short term liabilities
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debts that must be paid within 1 year
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DuPont Analysis
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ROE=PM*TAT*EM=profit margin*Total asset turnover*Equity Mult
=NI/TI=(net income) / Taxable Equity |
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discount
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calculate the present value of some future amount
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discounted cash flow
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valuation calculating the present value of a future cash flow to determine its value today
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market vs book value
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Market value- is the actual cash we would get for an item if we actually sold it
Book Value- values on the balance sheet for the firm's assets |
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IPO
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The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
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sole-proprietorship
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is a business owned by one person. (keeps all the profits and takes all the liabilities)
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corporation
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is a legal "person" that and distinct from it owners and has many rights, duties and privileges of an actual person.
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partnership
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there are 2 or more owners that take in all the shares and losses and all have unlimited liabilities
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LLC companies or joint stock companies
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it is operated and taxed like a partnership but retain limited liability for the owners. A hybrid of a partnership and corporation.
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profit margin
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measure of the firm's operating efficiency- how well does it control costs
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total asset turnover
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a measure of how well the firm's manages its assets
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Equity multiplier
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a measure of the firm's financial leverage
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APR
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Annual Percentage Rate- period rate times the number of periods per year
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EAR
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Effective Annual Rate- is the actual rate paid (or received) after accounting for compounding that occurs for the year
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capital structure
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the mixture of debt and equity maintained by time
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capital budgeting
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the process of planning and managing a firm's long term investments
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credit management
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Policies aimed at serving the dual purpose of (1) increasing sales revenue by extending credit to customers who are deemed a good credit risk, and (2) minimizing risk of loss from bad debts by restricting or denying credit to customers who are not a good credit risk.
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62. The treasurer’s functions are separated from the controller’s functions in a corporation. List the primary functions that are assigned to each of these individuals.
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Treasurer: cash management, credit management, capital expenditures, financial planning
Controller: tax management, financial management, cost accounting, data processing |
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Limited liability company: Pros and Cons
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Advantages:profits taxed as personal income, limited liability for the owners
Disadvantages:must meet IRS requirements to avoid double taxation |
