Chapter 3 Flashcards Preview

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Flashcards in Chapter 3 Deck (13):
1

operating expenses

marketing and selling expenses, general administrative expenses and depreciation expenses

2

gross profit margin

gross profit as % of sales

3

operating profit margin

measure of operating effectiveness in the company
low% - higher costs per dollar sales

4

net profit margin

net income as % of sales

5

treasury stock

firms stock that has been issued and then repurchased by firm

6

debt ratio

percentage of assets that financed by debt

7

marginal tax rates

tax rate that would be applicable to the next dollar of income

8

assets =

assets = liabilities + equity

9

types of assets

current, fixed, other

10

types of debt (liabilities)

current and long term

11

net working capital

companies ability to repairs its debt if it has capital
ratio between current assets:current liabilities needs to be greater than 1

12

taxable income

consists of operation income and capital gains

13

capital gains

gains from selling any asset that is not part of the ordinary operations