CHAPTER 7: How to Obtain Right Financing 4 Your Business Flashcards
Fixed Assets
Those that are of a relatively permanent nature and are necessary for the functioning of the business
Working Capital
current assets, less current liabilities, that a firm uses to produce goods & services, and to finance the extension of credit to customers
Cash Budgets
project working capital needs by estimating what out-of-pocket expenses will be incurred and when revenues from these sales are to be collected
Equity
An owner’s share of the assets of a company. In a corporation, it is represented by shares of common or preferred stock
Stock
represents ownership in a corporation
Debt Financing
comes from lenders who will be repaid at a specified interest rate within a specified time span
Financial Leverage
is using fixed-charge financing, usually debt, to fund a business’s oeprations
Lease
a contract that permits use of someone else’s property for a specified time period
Common Stock
representing the owner’s interest, usually consists of many identical shares, each of which gives the holder one vote in all corporate elections
Common Stockholders
are the owner’s of a corporation with claim to a share of the profits and the right to vote on certain corporate decisions
Preferred Stock
has a fixed par value and a fixed dividend payment, expressed as a percentage of par value
Preferred Stockholders
are owners with a superior claim to a share of the firm’s profits, but they often have no voting rights
Small Company Offering Registration (SCOR)
the sale of common stock to the public through a regulated board such as Nasdaq or AMEX without the hassle of an initial public offering.
Short-Term Securities
matures in <1 year
Intermediate-Term Securities
matures in 1-5 years
