Chapter 2 Flashcards Preview

Finance 301 > Chapter 2 > Flashcards

Flashcards in Chapter 2 Deck (11):
1

Balance Sheet

Financial Statement showing a firm's accounting value on a particular date

2

Net Working Capital

Current Assets - Current Liabilities

3

Generally Accepted Acounting Principles (GAAP)

Common set of standards and procedures by which audited financial statements are prepared

4

Income Statement

Financial statement summarizing a firm's performance over a period of time

5

Noncash Items

Expenses charged against revenues that do not directly affect cash flow (i.e. depreciation)

6

Average Tax Rate

Total taxes paid
Total Taxable Income

7

Marginal Tax Rate

Amount of tax payable on the next dollar earned

8

Cash Flow from Assets

Total of cash flow to creditors and cash flow to stockholders, consisting of the following:
Operating Cash Flow
Capital Spending
Change in Net Working Captal

9

Operating Cash Flow

Cash generated from a firm's normal business activites

10

Free Cash Flow

Another name for cash flow from assets

11

Cash Flow to Creditors

A firm's interest payments to creditors - net new borrowings