Accounts Payable Turnover measures the number of times a year a company is able to pay its accounts payable Accounts Receivable Turnover measures a company s ability to collect cash from credit customers Accrued Expense expense incurred but not yet paid in cash Accrued Liability liability for an expense that has not yet been paid by the company also called accrued expense Acid Test Ratio tells whether the entity can pay all its current liabilities if they come due immediately Authorized Stock maximum number of shares a corporation can issue under its carter Benchmarking comparison of a company to a standard set by other companies with a view toward improvement Bonds Payable Groups of debt securities issued to multiple lenders called bondholders Bonus the amount over and above regular compensation Book Value Per Share amount of common stockholders equity on the company s books for each share of its stock Cash Conversion Cycle of days it takes to convert inventory to receivables and receivables into cash after paying off payables Cash Equivalents Highly liquid short term investments that can be converted into cash immediately Cash Flows Cash receipts cash payments Callable Bond Bonds that are paid off early at a specified price at the option of the issuer Capital Charge amount stockholders and lenders charge a company for the use of their money Capital Lease lease agreement in which the lessee assumes the risks rewards of asset ownership Commission of sales employee has made Contingent Liability not an actual liability Ex future obligations that may arise due to lawsuits tax disputes or alleged violations of environmental protection laws Contributed Capital amount of stockholder s equity that stockholders have contributed to the corporation Convertible Bonds or notes bonds notes that may be converted into the issuing company s common stock at the investor s option Common Size Statement financial statement that reports only s no amounts Common Stock most basic form of capital stock Comprehensive Income company s charge in total stockholder s equity from all sources other than from the owners of the business Cumulative Preferred Stock preferred stock whose owners must receive all dividends in arrears before the corporation can pay dividends to common stockholders Current Liabilities obligations due within one year or within the company s normal operating cycle if longer than a year known amounts estimated amounts Current Portion of Long Term Debt current maturity and current Installment amount of the principal that is payable within one year Current Ratio measures company s ability to pay current liabilities w current assets Day s Payable Outstanding DPO found by dividing the turnover into 365 Debentures Unsecured bonds bonds backed only by the good faith of the borrower Deficit Negative debit balance in retained earnings caused by net losses over a period of years Discount on a bond excess of a bond s face par value over its issue price Discounts on Bonds Payable adjusts carrying value of the bonds as they march upward toward maturity value amortizes the discount to interest expense Dividend distributions usually cash by a corporation to its stockholders cash stock noncash assets Double Taxation Corporations pay income taxes on corporate income then stockholders pay personal income tax on the cash dividends that they receive from corporations DuPont Analysis analyzing rate of return on common stockholders equity Earnings Per Share EPS amount of a company s net income earned for each share of its outstanding common stock Efficient Capital Market capital market in which market prices fully reflect all info available to the public Employee Income Tax Payable the employee s income tax and Medicare tax which also are withheld from paychecks Equity FICA Tax Payable includes employee s Social Security tax and Medicare tax which are withheld from paychecks Foreign Currency Exchange Rate measure of one county s currency against another country s currency Financial Accounting Standards Board FASB provides guidelines to accrue and disclose Hedging to protect oneself from losing money in one transaction by engaging in a counterbalancing Free Cash Flow amount of cash available from operation after paying for planned investments in plant asset s Horizontal Analysis Study of changed in line items on comparative financial statements Interest the rental fee on borrowed money Initial Public Offering first time a corporation issues stock to the public which causes the of issued outstanding shares of stock to increase Inventory Turnover ratio of cost of goods sold to avg inventory indicates how rapidly inventory is sold Issued Stock of shares a corporation has issued to its stockholders Preferred Stock stock that gives its owners advantages such as priority to receive dividends before the common stockholders and the priority to receive assets before the common stockholders if the corporation liquidates Pre taxed Accounting Income Income before tax on the income statement Principle of Representational Faithfulness requires companies disclose the substance of their financial positions and results of operations in a way that is transparent and complete as possible When in doubt disclose When necessary accrue Lease rental agreement in which the tenant lessee agrees to make rent payments to the property owner lessor in exchange for the use of the asset Legal Capital minimum amount of stockholders equity that a corporation must maintain for the protection of creditors par value of shares issued Leverage Ratio measures the proportion of avg total assets actually owned by the stockholders Limited Liability No personal obligation of a stockholder for corporations debts can lose no more on an investment than the cost of the investment Liquidation Value amount a corporation must pay a preferred stockholder in the event the company liquidates goes out of business Long Term Debt refers to long tem notes payable and bonds payable Market Capitalization market price of one share of common stock X total of common shares outstanding at a particular date Market Interest Rate Interest rate that investors demand for loaning their money effective interest rate Maturity Date when the bond obligates the issuing company to pay the debt at a specific future time Market Value of a stock Price for which a person could buy or sell a share of stock Operating Lease lease in which the lessee does not assume the risks or rewards of