[FINMAN]
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| Balance Sheet | show 🗑
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| Current Assets | show 🗑
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| Non-current/Fixed Assets | show 🗑
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| Current Liabilities | show 🗑
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| show | Common stock, Retained Earnings
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| show | Presents the results of business operations during a specified period
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| show | Summarizes the revenues generated and the expenses incurred
during a particular accounting period, such as one fiscal year
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| show | Reports the effect of the firm’s activities—operating, investing, and financing—on its cash position over some period
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| Statement of Cash Flows | show 🗑
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| show | This statement not only provides insight into a company’s investment, financing and operating activities, but also ties together the income statement and previous and current balance sheets
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| Borrow (Liability), Issue stock (Equity), Sell inventory (Asset) | show 🗑
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| In operating activities, an increase in accounts receivable causes a _____ in the cash provided by operating activities | show 🗑
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| Statement of Retained Earnings | show 🗑
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| show | Involves methods of calculating and interpreting financial ratios to analyze and monitor the firm’s performance.
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| show | These are designed to show relationships between financial statement accounts within firms and between firms, no matter their sizes
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| show | Primary purpose of ratio analysis
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| Cross-sectional analysis | show 🗑
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| show | A type of ratio comparison: a type of cross-sectional analysis in which the firm’s ratio values are compared to those of a key competitor or group of competitors that it wishes to emulate
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| show | A type of ratio comparison: the evaluation of the firm’s financial performance over time using financial ratio analysis
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| Time-series analysis | show 🗑
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| show | Measures the ability of the firm to meet its short-term obligations
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| show | excludes inventory, which is generally the least liquid current asset
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| Difficulty in meeting future obligations | show 🗑
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| Inventory Turnover Ratio | show 🗑
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| show | Measures the average number of days it takes for a company to collect cash from credit purchases
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| The firm is not collecting quickly as it should. | show 🗑
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| show | Reveals how efficient a company is at generating sales from its existing fixed assets
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| show | Indicates the efficiency with which the firm uses its assets to generate sale
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| show | What happens if the total assets turnover ratio is below the industry average?
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| show | These ratios analyze if the firm can handle more liabilities / debt
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| show | A type of debt management ratio: Measures the proportion of total assets financed by the firm’s creditors
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| show | A type of debt management ratio: Measures the firm’s ability to make contractual interest payments
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| Fixed Charge Coverage Ratio | show 🗑
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| show | The debt management ratios
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| It will be difficult for the firm to borrow additional funds until its debt position is improved | show 🗑
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| show | A ratio that combines the effects of liquidity, asset, and debt management affect profits (income)?
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| show | a type of profitability ratio: Measures the percentage of each sales dollar remaining after all costs and expenses, including interest, taxes, and preferred stock dividends, have been deducted
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| show | a type of profitability ratio: Management in generating profits with its available assets
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| Return on Common Equity (ROE) | show 🗑
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| Market Value Ratios | show 🗑
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| Price / Earnings Ratio | show 🗑
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| show | A type of market value ratio: provides an assessment of how
investors view the firm’s performance
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| Common Size Analysis | show 🗑
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| Vertical Common-size balance sheet | show 🗑
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| Horizontal common-size balance sheet | show 🗑
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| show | An analysis is used to dissect the firm’s financial statements and to assess its financial condition
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| Net Profit Margin * Asset Turnover Ratio | show 🗑
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| ROA * FLM (Financial Leverage Multiplier) | show 🗑
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| Financial Leverage Multiplier | show 🗑
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| DuPont Equation | show 🗑
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| show | can make ratios look better than they really are
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| Financial Markets & Institutions, Investments, Financial Services, and Managerial Finance | show 🗑
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| Financial markets and institutions | show 🗑
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| show | This area of finance focuses on the decisions made by businesses and individuals as they choose securities for their investment portfolios.
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| show | refer to functions provided by organizations that deal with the management of money.
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| Managerial Finance | show 🗑
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| Management, Marketing, Accounting | show 🗑
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| Financial managers rely on accounting information. Therefore, financial managers create strategies | show 🗑
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| show | What areas of non-finance do finance relate to?
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| show | Who are the key subordinates of the financial vice president?
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| Treasurer | show 🗑
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| show | Responsible for the activities of the accounting and tax departments
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| Sole proprietorship | show 🗑
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| show | "Pros" of Sole Proprietorship
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| Unlimited liability, limited life (dependent on the owner), transferring of ownership takes time Difficult to obtain large capital | show 🗑
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| Partnerships | show 🗑
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| Corporate Charter | show 🗑
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| show | A set of rules drawn up by the founders of the corporation that indicates how the company is to be governed; includes procedures for electing directors, rights of stockholders, and how to change the bylaws when necessary.
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| show | A Principle in Finance: Investors expect to be compensated for taking on additional risk.
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| show | A Principle in Finance: A dollar received today is worth more than a dollar received in the future.
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| Cash is King | show 🗑
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| Incremental Cash Flows | show 🗑
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| show | A Principle in Finance: The potential for conflicts of interest between the goals of a firm's owners and its managers.
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| show | A Principle in Finance: Consideration of tax implications in
financial decision-making
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| All Risk is Not Equal | show 🗑
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| Ethical Behavior | show 🗑
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| Mergers and Acquisitions | show 🗑
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| show | A Principle in Finance: The value of any investment is determined by the present value of its future cash flows.
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| Financial Institutions | show 🗑
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| Financial Markets | show 🗑
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| show | a type of financial market: the markets for short-term
financial instruments
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| show | a type of financial market: the markets for long-term
financial instruments
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| Debt markets | show 🗑
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| show | a type of financial market: Where stocks are traded
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| show | a type of financial market: are financial markets in which
preowned securities (those that are not new issues) are traded.
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| Primary markets | show 🗑
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| Derivatives markets | show 🗑
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| Investment Banker | show 🗑
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| show | Electronic systems used to transfer transaction information quickly
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| show | Jurisdiction over interstate offerings of new securities to the general public & they have the power to prohibit manipulation of securities’ prices
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| show | What stage decision comprise:
• Decision about amount to be raised
• Type of securities used to raise funds
• Selection of an investment banker
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| show | What stage decision comprise:
• Reevaluate the initial decisions
• Best efforts or underwritten issues
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| show | investment bank guarantees the sale by purchasing the securities from the issuer
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| show | investment bank gives no guarantee all the securities will be sold
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| Flotation costs | show 🗑
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| Underwriting Syndicate | show 🗑
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| show | The member of an underwriting syndicate who manages the distribution and sale of a new security offering
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| Selling Group | show 🗑
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| Shelf Registrations | show 🗑
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| Corporate Charter | show 🗑
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| show | A set of rules drawn up by the founders of the corporation that indicates how the company is to be governed; includes procedures for electing directors, rights of stockholders, and how to change the bylaws when necessary.
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| general partnership | show 🗑
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| limited liability partnership (LLP) | show 🗑
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| show | Offers the limited personal liability associated with a corporation; however, the company’s income is taxed like that of a partnership.
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| S Corporation | show 🗑
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| show | Difference of LLC and S Corporation
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| show | The appropriate goal for management decisions; considers the risk and timing associated with expected cash flows to maximize the price of the firm’s common stock.
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| capital structure decisions | show 🗑
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| capital budgeting decisions | show 🗑
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| show | what to do with net cash flows generated by the firm—reinvest them in the firm or pay dividends
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| show | The present, or current, value of the cash flows that an asset is expected to generate in the future.
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| show | when one or more individuals, who are called the principals, hire another person, the agent, to perform a service and delegate decision-making authority to that agent.
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| agency problem | show 🗑
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| Managerial compensation (incentives) | show 🗑
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| Shareholder intervention | show 🗑
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| show | The acquisition of a company over the opposition of its management.
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| show | A company’s attitude and conduct toward its stakeholders (employees, customers, stockholders, and community). Ethical behavior requires fair and honest treatment of all parties.
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| Corporate governance | show 🗑
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| stakeholders | show 🗑
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| proxy votes | show 🗑
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| show | Organizations of companies in different industries with common ownership interests, which include firms necessary to manufacture and sell products; networks of manufacturers, suppliers, marketing organizations, distributors, retailers, and creditors
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| multinational companies | show 🗑
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| show | The prices at which the currency of one country can be converted into the currencies of other countries.
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| show | A report issued by a corporation to its stockholders that contains basic financial statements as well as the opinions of management about the past year’s operations and the firm’s future prospects.
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| balance sheet | show 🗑
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| show | The funds provided by common stockholders—common stock, paid-in capital, and retained earnings; equals total assets minus total liabilities.
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| common size balance sheet | show 🗑
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| show | The amount of the firm’s earnings that has been reinvested in the firm rather than paid out as dividends.
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| common stock at par | show 🗑
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| paid-in capital | show 🗑
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| show | The values, or accounting numbers, that are reported on the balance sheet
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| No. In terms of depreciation for long-term assets, their value decreases overtime, eventually leading to a lower market value compared to the issued value (book value). | show 🗑
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| Income statement | show 🗑
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| show | It is called as “the bottom line” because it is often considered the most important item on the income statement.
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| Net operating Income / Earnings before interest and taxes) | show 🗑
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| statement of cash flows | show 🗑
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| show | those associated with the production and sale of goods and services.
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| show | arise from the purchase or sale of plant, property, or equipment.
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| Financing cash inflows | show 🗑
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| statement of retained earnings | show 🗑
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| liquid asset | show 🗑
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| show | Ratios that show the relationship of a firm’s cash and other current assets to its current liabilities; they provide an indication of the firm’s ability to meet its current obligations.
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| show | A set of ratios that measures how effectively a firm is managing its assets.
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| Inventory turnover | show 🗑
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| show | used to evaluate the firm’s ability to collect its credit sales in a timely manner.
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| Fixed assets turnover | show 🗑
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| Financial leverage | show 🗑
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| Only interest on debt, not dividends | show 🗑
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| show | represents the proportion of the firm’s funds that is provided by stockholders.
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| show | measures the profit (earnings) per dollar of sales; that is, the percentage of each $1 of sales that remains after all expenses, including taxes, are paid.
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| P/E ratio | show 🗑
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| show | gives another indication of how investors regard the company.
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| comparative ratio analysis | show 🗑
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| trend analysis | show 🗑
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| show | If the company were financed only with common equity—that is, if it had no debt—the ROA and the ROE would ____,
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| financial markets | show 🗑
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| financial markets | show 🗑
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| direct transfer | show 🗑
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| financial intermediary | show 🗑
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| investment banker | show 🗑
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| economic efficiency | show 🗑
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| show | states that all information contained in past price movements is fully reflected in current market prices.
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| Semistrong-form efficiency | show 🗑
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| abnormal return | show 🗑
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| Strong-form efficiency | show 🗑
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| show | The segments of the financial markets where the instruments that are traded have original maturities equal to one year or less.
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| show | the segments of the financial markets where the instruments that are traded have original maturities greater than one year.
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| debt markets | show 🗑
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| equity markets | show 🗑
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| Primary markets | show 🗑
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| Secondary markets | show 🗑
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| show | Financial markets where options and futures are traded.
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| initial public offering (IPO) market | show 🗑
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| show | two stock markets in the United States
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| show | consists of a network of dealers around the country and includes the well-known NASDAQ market. (equity market for not listed stocks).
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| show | The process of converting an exchange from a mutual ownership organization to a stock ownership organization
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| Trading floor brokers | show 🗑
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| Designated market makers (DMMs) | show 🗑
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| show | deal with high-volume trades to ensure the best price quotes are received y maintaining continuous up-to-date prices for the securities they are assigned.
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| listing requirements | show 🗑
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| over-the-counter (OTC) market | show 🗑
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| dealers | show 🗑
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| show | act as agents in bringing the dealers together with investors
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| show | a communications link between dealers and brokers.
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| show | who continuously monitor trading activities in various stocks to ensure such stocks are available to traders who want to buy or sell them.
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| show | The U.S. government agency that regulates the issuance and trading of stocks and bonds.
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| show | are electronic systems that quickly transfer information about securities transactions to facilitate the execution of orders at the best available prices
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| dual listing | show 🗑
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| show | mandates that the trade-through rule be used when securities are traded.
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| show | An organization that underwrites and distributes new issues of securities; it helps businesses and other entities obtain needed financing.
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| Dollars to be raised, Type of securities Competitive bid vs. negotiated Selection of an investment banker | show 🗑
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| Dollars to be raised | show 🗑
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| Type of securities used | show 🗑
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| show | Offer a block of its securities for sale to the investment banker that submits the highest bid of all interested investment bankers
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| Negotiated deal | show 🗑
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| show | the process of deciding which investment banker should be used.
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| show | Agreement for the sale of securities in which the investment bank guarantees the sale by purchasing the securities from the issuer, thus agreeing to bear any risks involved in selling the securities in the financial markets.
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| show | Agreement for the sale of securities in which the investment bank handling the transaction gives its best effort to sell a company’s securities, but does not guarantee the entire issue will be sold.
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| shelf registration | show 🗑
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| show | The process by which financial intermediaries transform funds provided by savers into funds used by borrowers
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| financial intermediaries | show 🗑
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| show | traditional “department stores of finance”—that is, they offer a wide range of products and services to a variety of customers.
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| Credit Unions | show 🗑
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| show | also known as savings and loan associations or S&Ls, cater to savers, especially individuals who have relatively small savings or need long-term loans to purchase houses.
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| Mutual Funds | show 🗑
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| Whole-Life Insurance Companies | show 🗑
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| Premium | show 🗑
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| Pension Funds | show 🗑
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Created by:
RamRamRam