Financial Preparation for Entrepreneurial Venture

Question 1

• Used for safekeeping personal cash and earn (minimal) interest
• Instrument for banks to acquire business capital and/or for further investment

Answer 1

Bank accounts

Question 2

4 common types of bank accounts

Answer 2

• savings account
• checking or current account
• time deposit
• hybrid account (combination of the three) aka premium accounts

Question 3

Bank accounts

________ are eligible for personal loans, car loans, housing loans, mortgage, etc.

Answer 3

Premium depositors

Question 4

Other term for bank accounts

Answer 4

Certificates of deposits

Question 5

What does mantaining balance mean in deposits

Answer 5

What should be left in your savings

Question 6

What will happen if the money you have in your account is below the minimum deposit/maintaining balance?

Answer 6

You will be penalized

Question 7

Annual interest means what

Answer 7

You have to maintain an account for a year before getting any benefits

Question 8

does checking account have any interest?

Answer 8

No

Question 9

In ________, interest depends on time and holding period

Answer 9

time deposit

Question 10

What is a post-dated cheque?

Answer 10

Cheque wherein the date is written later

Question 11

What is the expiration of a cheque?

Answer 11

It’s only good for 6 months

Question 12

Money in cheque should be _____________

Answer 12

less than the money in in the checking account

Question 13

What happens if the ammount of money in the cheque is supposedly more than 300K?

Answer 13

Estafa (criminal offense)

Question 14

According to our law, how much are the tax for the different types of bank accounts?

Answer 14

20%

Question 15

In this type of bank account, you cannot use the money you deposited for the chosen holding period

Answer 15

Time deposit

Question 16

• All-in-one savings, current, and time deposit. (Commonly offered by international banks. Seldom, by local banks.)

Answer 16

Bank accounts (money market accounts)

Question 17

Minimum deposit amount (or ADB) for money market accounts

Answer 17

P100,000

Question 18

Bank accounts

• Minimum deposit amounts differ per currency
• Interest is tiered and depends on currency
• Cash access thru: OTC-passbook, chequebook, ATM, online.
• Subject to withholding tax.

Answer 18

Foreign currency accounts

Question 19

Securities investment

Represent shares of ownership (equity) of a (publicly traded) corporation — thus, stockholders become partial owners of the company

Answer 19

stock

Question 20

Securities saving

when a corporation goes public, i.e. starts selling stocks

Answer 20

IPO (Initial Public Offering)

Question 21

securities investment

2 types of stock shares

Answer 21

• common stock
• preferred stock

Question 22

2 types of stock shares

high risk, high return depending on the stock market fluctuations

Answer 22

common stock

Question 23

2 types of stock shares

usually fixed returns, thus, low risk and low return

Answer 23

preferred stock

Question 24

securities investment

purchase and selling price of stocks

Answer 24

stock price

Question 25

# securities investment number of shares of stock

Answer 25

stock volume

Question 26

# securities investment currency value of shares of stock

Answer 26

stock value

Question 27

# securities investment earnings of the company shared to stock holders

Answer 27

dividends

Question 28

# Price to earnings ratio in stocks * could mean overvalued, bought a lot, or good earnings

Answer 28

high

Question 29

# Price to earnings ratio in stocks stocks are not popular or earnings could be low

Answer 29

low

Question 30

# Price to earnings ratio in stocks usually no earnings and not displayed

Answer 30

negative

Question 31

# Stocks: dividend yield earnings are high and/or company pays high dividends

Answer 31

high

Question 32

# Stocks: dividend yield earnings are low or company pays low dividends

Answer 32

low

Question 33

# securities investment * Securities sold (issued) by corporations, financial institutions or the government to interested investors (bondholders). * When enterprises sell this to interested investors they are actually borrowing money from the bondholders.

Answer 33

bonds

Question 34

# Bonds: common features price of bond at initial purchase; amount to be returned upon maturity of the bond.

Answer 34

face value or par value

Question 35

# Bonds: common features interest paid once or several times a year until maturity

Answer 35

coupon

Question 36

# securities investment * Funds setup by investment companies or are investment companies themselves * Funds that invest on a strategic mix of stocks, bonds, and money market.

Answer 36

mutual funds

Question 37

# securities investment * Maintained by investment managers who are paid based on earnings of the fund — earnings are somehow guaranteed * Large amount of investment is (usually) required * NAVPS — net asset value per share

Answer 37

mutual funds

Question 38

# relevant terms Maximum loanable amount

Answer 38

credit limit

Question 39

# relevant terms total amnt due + interest

Answer 39

balance due

Question 40

# relevant terms withdrawing money from your credit limit

Answer 40

cash advance

Question 41

# Financial statement analysis each item in the income statement is found qas a % of the total assets

Answer 41

vertical analysis

Question 42

# Financial statement analysis trending or comparison of current vertical analysis with previous years'

Answer 42

comparative analysis

Question 43

# Financial statement analysis computation of growth rates (or %change of items in the I/S)

Answer 43

horizontal analysis

Question 44

# Financial ratios Is the firm making enough cash to pay its short-term obligations?

Answer 44

current ratio

Question 45

# Financial ratios Is the firm making enough cash to pay its shortterm obligations without having to rely on its inventories?

Answer 45

quick ratio

Question 46

# Financial ratios how fast or inventories moving (being sold)?

Answer 46

inventory turnover

Question 47

# Financial ratios how fast (or slow) are payments to the firm made?

Answer 47

Daily Sales Outstanding or Average Collection Period: DSO or ACP

Question 48

# Financial ratios How much of total assets translate to sales or revenues?

Answer 48

total assets turnover

Question 49

# Financial ratios how much of the firm's assets (including capital) are on credit or debt?

Answer 49

debt ratio

Question 50

# Financial ratios how much of total assets translate into profit

Answer 50

return on assets

Question 51

# Financial ratios return on stockholders' investments

Answer 51

return on stockholders' investments