Flashcards in Chapter 1 Deck (23):
An obligation, debt or responsibility owed to someone.
Anything of value
One who owns shares of a stock.
Assets - Liabilities
Ownership, especially in terms of net monetary value, of a business.
Predicted return that an investor think he will earn based on a wide variety of factors.
A transaction that provides funds for a business.
Investor who prefers lower returns with known risks rather than higher returns with unknown risks.
Cost of Borrowing
The total charge for taking on a debt obligation that can involve interest payments and other financing fees.
They decide to sell their company to the public instead of to private investor.
Working Capital Management
Is to ensure that a firm is able to continue its operations.
Money & Wealth to acquire goods & services.
The use of borrowed funds with a contractually determined return to increase the ability of a business to invest and earn an expected higher return (usually at high risk).
A financial statement includes what 4 things
1. Income Statement
2. Cash Flow
3. Balance Sheet
Assets, Liabilities and Equity of a company at a point in time.
All the money coming in and out of a business and separated into three categories.
Short term viability of a company.
expenses and profits to show whether the company made or lost money. It also displays the revenues of a specific period, and the cost and expenses charged against these revenues. In contrast with the balance sheet, which represents a single moment in time, the income statement represents a period of time.
Financial statements are used to find key info about the performance and disposition of a company.
Assessment of a company's viability, stability, and profitability.
Generally Accepted Accounting Principles
Verification of a financial statement to ensure its integrity and build confidence in those using it.
Limitations of the Financial Statement.
1. Human Error and Manipulation
2. Different accounting measures
3. Focused solely on Financial Measures.
The TCA / FCA argues that it should have a triple bottom line for economic, social and enviorment laws benefits.
Profit received before expenses are taken out.