View
- Term
- Definition
- Both Sides
Study
- All (48)
Shortcut Show
Next
Prev
Flip
MANGMT 1010: Exam 2
Asset |
any economic resources expected to benefit a firm or an individual who owns it. |
Liability |
a debt owned by a firm to an outside organization or individual. |
Owners' Equity |
the amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities. |
Common Stock |
a form of corporate equity ownership, a type of security. Among the riskiest of all securities |
Par Value |
face value of a share of stock at the time it is originally issued, when it first comes out. |
Market value |
the current price of a share in the stock market, what investors are willing to pay, equilibrium price. |
Book Value |
the value of a common stock expressed as total shareholders' equity divided by the number of shares of stock. Measures the relative value worth at a given moment, # of stocks lower then market value what the firm will do in the future. |
Blue-chip stock |
A blue chip stock is the stock of a well-established company having stable earnings and no extensive liabilities. |
Bond |
security through which an issuer promises to pay the buyer a certain amount of money by a specified future date. |
Government Bond |
issued by the federal government, lowest risk. |
Municipal Bond |
issued state or local government, do not pay tax on interest. |
Corporate Bond |
issued by a company as a source of long-term funding, most common - cover more $$ than government and municipal bonds combined. Longer maturity = higher yield = more risk |
Accounting |
is a comprehensive system for collecting, analyzing adn communicating financial information. This field has changed so much. |
Bookkeeping |
Bookkeeping is the recording of financial transactions. |
Accounting Information System |
An accounting information system (AIS) is the system of records a business keeps to maintain its accounting system. Organized means by which financial information is recorded and retained for use in accountings statements and management reports. |
Controller |
Top Dog, person who manages all of a firm's accounting activities (chief accounting officer) |
Financial accounting system |
concerned with external information users (tax payers, investors and government agencies) |
Managerial/Management |
accounting system serves internal users. Internal users are managers and employees, aids managerial decision making |
Certified Public Accountant CPA |
accountant licensed by the state and offering services to the public, outside accountant. |
Audit |
systematic examination of a company's accounting system to determine whether its financial reports fairly represent its operations, financial reports are GAP: general accountnating practices |
Accounting equation |
assets = liabilities + owners equity |
Asset |
an economic resource expected to benefit a firm or an individual who owns it. |
Liability |
is a debt owned by a firm to an outside organization or individual. |
Owners equity |
the amount of money that owners would receive if they sold all of a firm's assets and pain all of its liabilities. |
Balance sheet |
supply detailed information about the accounting equation factors. One point in time. |
Current assets |
accounts receivable, tangible |
Fixed assets |
land, factory, equipment |
Intangible assets |
non-monetary assets that cannot be seen, touched or physically measured, patents and trademarks. |
Current Liabilities |
account payable |
Long-term Liabilities |
outstanding payable for greater then one year. |
Income statement (profit and loss statement) |
lists a firm's annual revenues and expenses so that a bottom line shows annual profit or loss. A video showing what has happened. |
Revenues |
profit + cost |
Statement of cash flows |
describes a firm's yearly cash receipts and cash payments with three activities; cash flow from operations, cash flow from investing, cash flow from financing. |
Revenue recognition |
is the formal recording and reporting of revenues in financial statements. |
Matching |
a principle stating that expenses will be matched with revenues to determine net income for an accounting period |
Full Disclosure |
means that financial statements should not include just numbers. |
Solvency ratios |
both short and long term, estimate risk made up of debt ratio and liquidity ratio |
Liquidity ratio |
short-term solvency ratios, measures a firm's ability to pay its immediate debts. |
Current Ratio |
current assets/current liabilities |
Debt Ratio |
long-term solvency ratio, measures a firm's ability to meet its long-term debts. |
Leverage |
ability to finance investments through borrowed funds. |
Profitability ratios |
measures a potential earning |
Return on Equity |
measure income for each dollar invested |
Earnings per share |
measures the size of the dividend that a firm can pay shareholders.
net income/# of shares outstanding |
Activity Ratios |
reflect management's use of assets |
Inventory Turnover Ratio |
measures the average number of times that inventory is sold and restocked during the year.
High turnover is a good thing, you don't want to hold inventory for a long time Hallmark example |
International Transactions |
international purchases, credit sales and accounting for foreign subsidiaries all involve transactions affected by exchange rates. |
International Accounting Standards |
the international accounting standards board (IASB) tried eliminating national differences in financial reporting procedures.
This is extremely important. |