Chapter 4: Balance Sheets Flashcards
(18 cards)
balance sheet/position statement
snapshot of a business’s financial position at a point in time
Assets on balance sheet (2)
current and fixed
Liabilities on balance sheet (2)
current and long-term
Owner’s equity on balance sheet (2)
shares and retained earnings
Current assets
assets expected to be converted to cash within a year or less
current asset examples (6)
cash
receivables
short term notes
inventory
WIP
prepaid expenses
fixed assets
assets where cash is difficult to convert without affecting core operations
fixed asset examples (5)
land/buildings/equipment
less accumulated depreciation
long term investments
goodwill
intangible assets
current liabilities
liabilities expected to be paid within a year
current liabilities examples (5)
short-term credit line
accounts payable
accounts expenses
taxes payable
LTD
Long-term liabilities (2)
Long-term debt
repayable grants
Shareholders equity examples (2)
capital shares
retained earnings
Goodwill
premium you paid to purchase a company.
purchase price - book value of business
working capital
current assets - current liabilities
- good measure of efficiency
- (+) means you can pay off short-term liabilities,
- (-) means you can’t with your current assets
working capital ratio
current assets / current liabilities
Minority interest
value of minority shareholder’s holding in a subsidiary or ownership that is less than 50% of outstanding
order of creditors during liquidation
- short term lender
- suppliers
- CRA
- other creditors with secured debt
- other creditors
- owners
shareholders equity
additional rights compared to common shareholders, preferred shares/stock
