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Business 18
| Question | Answer |
|---|---|
| term-loan management | a promissary note that requires the borrower to repay the loan in specified installments |
| indenture terms | the terms of agreement in a bond issue |
| promissary note | a written contract with a promise to pay a supplier a specific sum of money at a definite time |
| venture capital | money that is invested in new or emerging companies that are percieved as having great profit potential |
| commercial paper | unsecured promissory notes of $100,000 and up that mature in 270 days or less |
| revolving credit agreement | a line of credit thats guranteed but usually comes with a fee |
| line of credit | a given amount of unsecured short term funds a bank will lend to a business, provided the fundsare readily available |
| trade credit | the practice of buying goods and services now and paying for them later |
| factoring | the process of selling accounts receivable to cash |
| leverage | raising needed funds through borrowing to increase a firms rate of return |
| commercial finance companies | organization that make short term loans to borrowers who offer who offer tangible asses as collateral |
| rish/return trade off | the principle that the greater the rish a lender takes in making a loan, the higher the interest rate required |
| cost of capital | the rate of reurn a company must earn in order to meet the demands of its lenders and espectations of its equity holders |
| financial control | a process in which a firm periodically compare its actual revenues, costs, and expenses with its budget |
| captial expenditures | major investments in either tangible long term assets such as land, buldings, and equipment or intangible assets such as patents, trademarks, and compyright |
| capital budget | a budget that highlights a firms spending plans for major asset purhcases that often require large sums of money |
| debt financing | funds raised through various forms of borrowing that must be repaid |
| equity financing | money raised from within the firm, from operations or through the sale of ownership in the firm |
| short term financing | funds needed for a year or less |
| long term financing | funds needed for more than a year |
| unsecured loan | a loan that doesn't require any collateral |
| unsercured bond | a bond backed only by the reputation of the issuer; also called a debenture bond |
| secure bond | a bond issued with some form of contol |
| fianancial management | the job of managing a firms resuources so it can meet sets goals and objectives |
| financial managers | managers who examine financial data prepared by accountants and recommend strategies for improving the finanacial performance of the firm |
| finance | the function in a busniess that acquires funds for the firm and managers those funds within the firm |
| cash flow forecast | forecast that predicts the cash inflows and outflows in future periods, usually months or quarters |
| short term forecast | forecast that predicts revenues, costs, and expenses for a period of one year or less |
| long term forecast | forecast that predicts revenues, costs, and expenses for a period loner than 1 year and sometimes as far as 5 to 10 years into the future |
| budget | a financial plan that sets forth managements expectations and on the basis of those expectations allocates the use of specific resources throughout the firm |
| operating budget | the budget that ties together the firms other budgets and summarizes its proposed financial activities |
| cash budget | a budget that estimates cash inflows and outflows during a particualr period like a month or a quarter |
Created by:
lrb2590
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