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26 Cards in this Set
- Front
- Back
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Financing Activities |
Sources of money, equity and debt, borrowing money, issuing shared stock for cash |
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Investing Activities |
Purchase of resources a company needs to operate, assets |
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Operating Activities |
Results of operation, inventory, revenues, accounts receivable |
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Liquidity |
The ability to pay obligations expected to become due within the next year or operating cycle. Measured by capital and current ratio |
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Working Capital |
C. Assets - C. Liabilities |
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Current Ratio |
C. Assets / C. Liabilites |
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Solvency |
The ability to pay interest as it comes due and to repay the balance of a debt due at its maturity. Measured by debt to assets ratio and debt to equity |
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Liquidity Ratio |
Measure Short term ability of the company to pay its maturing obligations and to meet unexpected needs for cash |
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Solvency Ratio |
Measure the ability of the company to survive over a long period of time |
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Debt to Asset Ratio |
T. Liabilities / T. Assets |
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Debt to Equity Ratio |
T. Liabilities / T. Equity |
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Free Cash Flow |
Cash provided by operations, capital expenditures, cash dividends. A measurement to provide additional insight regarding a company's cash generating ability |
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Economic Entity Assumption |
Every economic entity can be separated idetified and accounted for |
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Monetary Unit Assumption |
Requires that only those things that can be expressed in money are included in the accounting records |
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Periodic Assumptions |
States that the life of a buisness van be divided into artificial time periods |
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Going Concern Assumption |
The buiness will remain in operation for the forseeable future |
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Historical Cost Principle |
Dictates that companies record assets at their original costs |
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Fair Value Principle |
Indicates thay assets and liabilities should be reported as a rational and unbaised estimate |
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Full Disclosure Principle |
Requires that companies disclose all circumstances and events that l would make a difference to financial statement users |
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Cost Constraints |
Weighing the cost thay companies will incur to provide the information against the benefit thay financial statement usres will gain from having the information available |
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Materiality |
A company specific aspect of relevance. An item is material when its size makes it likely to influence the decision of an investor or creditor |
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Expense Recognition Principle |
Matches expenses with revenues in the period when the company makes efforts to generate those revenues |
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Revenue Recognition Principle |
Companies recognize revenue in the accounting period in which the performance obligation is satisfied |
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Gross Profit Rate |
Gross Profit / Net Sales |
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Profit Margin |
Net Income / Net Sales |
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Quality of Earning Ratio |
Net cash provided by operating activities / net income |
