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FOB Chpt. 17
Chapter 17: Accounting and Finance
| Term | Definition |
|---|---|
| Accounting | the language of business |
| Managerial Accountants | internal support of accounting, gives information for decision makers within the company |
| Financial Accountants | external communicators, responsible for company financial statements |
| Secured Debt | borrowing money by presenting collateral (mortgage) |
| Unsecured Debt | borrowing money with no collateral |
| Equity | raising funds by selling a portion of ownership in the company |
| Income Statement | Revenues = Sales Cost of Goods Sold Gross Profit = Sales - COGS Operating Expenses Net Income = Gross margin - operating expenses |
| Balance Sheet | Assets and Liabilities |
| Assets | cash/savings, receivables, and property |
| Liabilities | car loans, payables, mortgage, student loan |
| Accounting Equation | Assets = Liabilities + Owner's Equity |
| Owner's Equity | the difference between assets and liabilities |
| Liquidity | how quickly assets can be turned into cash |
| Profitability Ratios | measures how effectively a firm’s managers are using the firm’s resources to achieve profits (ex. earnings per share) |
| Breakeven Point | Fixed Costs/Contribution Margin = units |
| Securities and Exchange Commission (SEC) | federal agency that regulates stock trades and ensured that companies tell the truth with respect to their financial positions |
| Efficiency Ratios | how well your assets are being managed |
Created by:
naddotey
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