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29 Cards in this Set

  • Front
  • Back
Balance Sheet
Reflectd a firm's accounting value on a particular date
Current Asset
Normally converts to cash within a year
Fixed Assets
Has a relatively long life
Tangible Asset
A fixed asset with physical existence
Intangible Asset
Valuable fixed asset that has NO physical existence
Net Working Capital
=Current Assets - Current Liabilities
Income Statement
Financial statement that reflects a firm's performance over a period of time
Pure discount
present value of a single lump sum to be repaid at some time in the future.
long term liabilities
debts that are NOT due within 1 year
short term liabilities
debts that must be paid within 1 year
DuPont Analysis
ROE=PM*TAT*EM=profit margin*Total asset turnover*Equity Mult
=NI/TI=(net income) / Taxable Equity
calculate the present value of some future amount
discounted cash flow
valuation calculating the present value of a future cash flow to determine its value today
market vs book value
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
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.
is a business owned by one person. (keeps all the profits and takes all the liabilities)
is a legal "person" that and distinct from it owners and has many rights, duties and privileges of an actual person.
there are 2 or more owners that take in all the shares and losses and all have unlimited liabilities
LLC companies or joint stock companies
it is operated and taxed like a partnership but retain limited liability for the owners. A hybrid of a partnership and corporation.
profit margin
measure of the firm's operating efficiency- how well does it control costs
total asset turnover
a measure of how well the firm's manages its assets
Equity multiplier
a measure of the firm's financial leverage
Annual Percentage Rate- period rate times the number of periods per year
Effective Annual Rate- is the actual rate paid (or received) after accounting for compounding that occurs for the year
capital structure
the mixture of debt and equity maintained by time
capital budgeting
the process of planning and managing a firm's long term investments
credit management
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.
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.
Treasurer: cash management, credit management, capital expenditures, financial planning
Controller: tax management, financial management, cost accounting, data processing
Limited liability company: Pros and Cons
Advantages:profits taxed as personal income, limited liability for the owners
Disadvantages:must meet IRS requirements to avoid double taxation