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Ch. 21
Financial Management
| Term | Definition |
|---|---|
| Comparative financial statement | Statement with financial data from two accounting periods. |
| Ratio Analysis | Comparison of two or more amounts on a financial statements and the evaluation of the relationship between these two amounts. |
| Current ratio | Compares current assets and current liabilities. |
| Working capital | Capital available to the business to carry out its daily operations. |
| Debt ratio | Percentage of total dollars in the business provided by the creditors . |
| Net profit on sales ratio | Number of cents left from each dollar of sales after expenses and income taxes are paid. |
| Operating ratio | Relationship between each expense and total sales reported in the income statement |
| Quick ratio | Measure of the relationship between short-term liquid assets and current liabilities. |
| Variable expenses | Business expenses that change with each unit of product produced such as supplies, wages, and production materials. |
| Fixed expenses | Expenses that do not change with number of units produced. |
| Budget | Formal, written statement of expected revenue and expenses for a future period of time. |
| Capital expenditures | Long-term commitments of large sums money to buy new equipment or replace old equipment. |
| Credit bureaus. | Agencies that collect information on how promptly people and businesses pay their bills. |
Created by:
kdesai303
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