Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

BYU > Ch4-6 > Flashcards

Ch4-6 Flashcards

(81 cards)

Start Studying
1
Q

Asset Usage Efficiency Lever

A

One of the three parts of the DuPont = S/TA.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Cash Budget

A

A forecasting tool typically used for the short term (a year or so)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

DFN

A

Discretionary financing (or funds) needed. How much cash the firm needs in a pro forma statement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Discretionary Accounts

A

Another name for non-spontaneous accounts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Dividend Payout Ratio

A

Dividends/Net Income.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Dividend Policy

A

The amount of dividends management decides to pay out to shareholders.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

EFN

A

External financing (or funds) needed. Another name for DFN.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Excess Capacity

A

When fixed assets do not need to increase as sales increase.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Full Capacity

A

When fixed assets have to increase if the firm wants to increase sales.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Leverage Lever

A

DuPont = TA/TE, also known as the equity multiplier.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Non-Spontaneous Accounts

A

Financial accounts that do not vary directly with sales.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Percent of Sales Forecast

A

A way to make pro forma financial statements based on a sales prediction and how accounts vary with sales.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Plowback Ratio

A

Another name for the retention ratio.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Pro Forma Statements

A

Future or forecasted financial statements.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Profitability Lever

A

DuPont = NI/S.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Retention Ratio

A

1 - dividend payout ratio.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

SGR

A

ROE * (1-Div/NI).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Spontaneous Accounts

A

vary directly with sales.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Annuity

A

A series of payments or receipts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Annuity Due

A

pays at the beginning of each period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Compounding

A

Future value of present money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Compounding Problem

A

When the periods, payments, and interest must be adjusted for non-annual time value of money problems.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Deferred Annuity

A

An annuity that starts sometime in the future.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Discount Rate

A

The rate at which money is discounted or compounded.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Discounting
Present value of future money.
26
Effective Yield
(1+stated rate/m)^m -1.
27
Future Value
Future spending power of money
28
FV
Future Value, a lump sum.
29
FVIF
Future value investment factor = PV * (1+r)^n.
30
FVIFA
Future value investment factor of an annuity.
31
I/Yr
Interest rate per period.
32
Lump Sum
A single amount of money.
33
N
Number of periods.
34
Ordinary Annuity
pays at the end of each period.
35
Perpetuity
An annuity that lasts forever.
36
PMT
Payment, the annuity payment.
37
Present Value
Spending power of money today.
38
PV
Present Value, a lump sum.
39
PVIF
Present value investment factor = FV/(1+r)^n.
40
PVIFA
Present value investment factor of an annuity.
41
Required Rate of Return
Another name for the discount rate.
42
Time Value of Money
The process of valuing money at specific points in time.
43
Uneven Cash Flows
A series of cash flows that are not equal.
44
Affirmative Covenant
A bond covenant that requires the firm to do something.
45
Bond
A fixed income financing instrument.
46
Bond Indenture
The legal document detailing a bond.
47
Bond Ratings
A rating assigned to a firm to measure the probability of default by a company like S&P or Moody's.
48
Convertible Bonds
Bonds that can be converted into equity at the owner's request.
49
Convexity
The curvature of the price-yield relationship not captures by duration.
50
Coupon Rate
Another name for coupon yield.
51
Coupon Yield
The rate the bond issuer promises to pay its investors.
52
Covenants
Rules set forth in the bond indenture to protect bond investors.
53
Current Yield
Annual Coupon/Current Market Value
54
Debenture
A bond that is not secured by collateral or guarantees.
55
Debt Capital
Firm financings that appears in the debt section of the balance sheet.
56
Duration
A measure of the interest rate sensitivity of a bond.
57
Eurobonds
Bonds issued in a country not in that country's currency.
58
Face Value
The lump sum amount paid on a bond's maturity date.
59
Fixed-Income Securities
pay an equal payment on fixed periods
60
Foreign Bonds
Bonds issued in a domestic market by a foreign firm, but in the domestic currency.
61
Inverse Price-Yield Relationship
When market yields go up, bond prices go down and vice versa.
62
Investment Grade
Bonds rated BBB or above.
63
Junk Bonds
Speculative bonds rated BB or below.
64
Macaulay Duration
A specific type of Duration, a measure of interest rate sensitivity.
65
Maturity Date
The date the bond issuer pays the face value and the bond expires.
66
Modified Duration
An adjusted version of Macaulay Duration which makes it a little more accurate.
67
Mortgage Bonds
secured by real property.
68
Muni
Short for municipal bond.
69
Municipal Bond
A bond issued by a local municipality
70
Negative Covenant
prohibits the firm from doing something.
71
Par Value
Another name for face value.
72
Promised Yield
Another name for yield to maturity.
73
Security Valuation
The process of valuing assets.
74
Subordinated Debenture
A lower-ranked bond that is not secured by collateral or guarantees.
75
Trade at Discount
When a bond's market price is less than its face value.
76
Trade at Premium
When a bond's market price is greater than its face value.
77
Treasury Bill
A short-term bond issued by the US federal government.
78
Treasury Bond
A bond issued by the US federal government
79
YTM
Yield to maturity, the required rate of return of a bond.
80
Zero Coupon Bond
Another name for zeros.
81
Zeros
Bonds that do not pay interest payments.

BYU (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions