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27 Cards in this Set
- Front
- Back
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share holders wealth
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groups that have an interest in the running of the company.
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why is there is a diff b/w stock holders and manager
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agencey problems
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agencey problems
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Stockholders/creditors
Stockholders/management |
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chief finance officer
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Oversees accounting, treasury, tax, and audit functions
Strategic planning, foreign currency management, managing risk form volatile interest rates, monitors production and inventory levels |
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controler
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over accounting related activities such as
Financial Accounting: preparation of financial statements such as balance sheet, income statement, statement of cash flows. Cost Accounting: prepare operating budgets and monitor performance. Taxes: prepare reports for local state and federal agencies |
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dis adv of sole prop
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Hard to acquire capital
Unlimited liability Long work hours with no division of labor |
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adv of partner
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Easy to Form
Easier to raise capital Some division of labor |
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adv of corp
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Limited liability
Permanency Flexibility Ability to raise capital Division of labor |
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diss adv of corp
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More difficult to start up
Agency costs—must hire managers to run can lead to owner/ agent conflict. Double taxation of profits |
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adv of sole propr
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Easy to start
You are the boss Requires less capital to start |
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limited partnership
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partner has limited liability
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Cash Flow Generation Process
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Raise Funds:
External: owners (equity) creditors (debt) Internal: cash flow from operations sell off assets Acquired assets: Long term (plant and equipment) Working capital (pay operating expenses) Produce and Sell Products and Services: Generates cash and accounts receivable which are converted to cash over time. |
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Dow Jones
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Industrial-stock prices of 30 large industrial companies
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Over the counter markets
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Trade securities not listed on the exchanges.
Usually small companies that are relatively unknown and do not meet listing standards of exchanges. Bank and insurance company, corporate bonds, preferred stocks most US treasury and municipal bonds are carried. |
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Commercial Banks
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accept both demand and time deposits, loan to individuals, businesses and government.
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Thrift Institutions
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accept both demand and time deposits
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holding period of return
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current value+ div- orig pri
-------------------------- orig price |
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Investment Companies
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mutual funds and real estate investment trusts
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Pension Funds
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pool contributions of employees and/or employers often managed by insurance companies or bank trust depts.
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avg collection period
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the length it takes for customers to pay there bill
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Insurance Companies
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receive periodic or lump-sum payments and invest these reserves to pay future claims
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Finance Companies
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issue debt securities or obtain commercial loans and lend to individuals and businesses. Some finance sale of products produced by parent company
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Financial Intermediaries-
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facilitate transfer of funds.
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Money Markets
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deal in short term securities (maturity of one year or less
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Capital Markets
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deal in long term securities ( maturity of more than 1 year.)
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Primary Market
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Market for new securities (funds go directly to issuing company
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Secondary Market
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Market for selling of existing securities (funds go to the present owner of the security)
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