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Definition
| The recording, classifying, summarizing and interpreting of financial events and transactions to provide management and other interested parties in the information they need to make good decisions |
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| looks inward to firm to assist in decision making |
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| looks at firm in entierty, for people outside of organization |
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| yearly statement of financial conditions, progress and expectations |
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| Accountant who works for one firm |
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| Accountant who works with several individuals/buisnesses |
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| Certified Public Accountant (CPA) |
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Definition
| Accountant who passes exams by American Institute of Certified Public Accountants |
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Definition
| The recording of buisness transactions |
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| Recording buisness transactions in 2 places in order to check for mistakes |
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| Specialized accounting book or program, organized by catagories |
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| Summary of all the financial data in the account legers, must be correct. |
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| Fundamental accounting equation |
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Definition
| Assets = Liabilities + owner's equity |
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Definition
| Financial statement that reports a firm's financial conditions at a specific time. Assets, Liabilities, owner's equity. |
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Definition
Economic resources owned by a firm
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| Ease with which an asset can be converted to cash |
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Definition
| Assets relatively perminant (land, buildings, equipment) |
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Definition
| long-term asets (patents, trademarks, copyrights) that have no physical form but do have value |
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Definition
| What buisness owes others |
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Definition
| current liabilities that company owes to others |
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| short term liabilities a firm owes that were paid for with credit |
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Term
| Income Statement/Net Income |
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Definition
| Financial that shows firms bottom line; the profit after costs, expenses and taxes. Net Income = what's left over |
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Term
Gross Profit
Net Income before Taxes
Net income/loss |
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Definition
Revenue - cost of goods = Gross Profit
Gross Profit - operating expenses = Net income before taxex
Net income before taxes - taxes = Net Income |
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Term
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Definition
1. Forecasting the firm's short-term and long-term financial needs
2. Developing budgets to meet those needs
3. Establishing financial controls to see if company is meeting its goals. |
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Definition
| Examine financial data and reccomend stratagies for improving financial policies. Includes Planning, managing taxes, budgeting, obtaining funds, etc |
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| A budget that highlights a fim's spending plans for major asset purchase that often require large sums of money |
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| Backed by collateral/not backed by collateral |
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| given ammount of money that bank will pay so long as the funds are available |
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| Revolving Credit Agreement |
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Definition
| line of credit that's gaurenteed but comes with a fee |
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Term
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Definition
1. Character of borrowers
2. Borrower's capacity to repay loan
3. The capital being invested in buisness by borrower
4. Conditions of economy and firm's industry
5. the collateral the borrower has available to secure loan |
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Definition
| A promissary note that required borrower to repay loan in specified installments |
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Definition
| terms of agreement in a bond issue |
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Definition
| Bond issued with some collateral/bond backed only by the reputation of issuer (debenture bond) |
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Definition
| Raising funds through borrowingto increase a firm's rate of return |
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Definition
| rate of return a company must earn in order to meet demands of lende |
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Definition
| Organization whose members buy and sell securities for companies and individual investors |
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| Over the Counter (OTC) mArket |
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Definition
| Exchange that provides a means to trade stocks not listed on national exchanges |
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Definition
| Specialists who assist in the issue and sale of new securities |
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Definition
| Large organizations (pension funds, mutual funds, insurance companies) that invest their own funds or the funds of others |
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Definition
| Nationwide electronic system that links dealers accross the nation to buy and sell stock electronically |
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| Securities and Exchange Commission (SEC) |
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Definition
| Federal agency that has responsibility for regulating various stock exchanges |
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| Condensed version of economic and financial information that a company must file with SEC before issuing stock |
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| Shares of ownership in a company |
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Definition
| Evidence of stock ownership including name of company, number of shares and type of stock |
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Definition
Part of a firm's profits that firm may distribute to stockholders either as cash or more shares of stock
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Term
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Definition
| Basic form of ownership, confers voting rights and right to share in the firms profits if dividends made |
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Term
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Definition
stock that gives oner preference in the payment of dividends and earlier claims of assets than common stockholders if company is forced out of buisness or it's assets are sold
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Definition
| Corporate certificate indicating that a person has lent money to a firm |
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Definition
| payment the issuer of the bond makes to the bondholders for use of the borrowed money |
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Definition
| reserve account to make sure that enough money will be available to pay bonds back on maturity date |
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Term
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Definition
1. Investment risk
2. Yield
3. Duration
4. Liquidity
5. Tax Consequenses |
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Term
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Definition
| positive difference between the purchase price of stock and its sale price |
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Term
Blue Chip stocks
growth stocks
income stocks
penny stocks |
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Definition
blue-chip: pay regular dividends, consistant
growth: earnings predicted to grow quickly
income: high dividend
Penny: low price, high risk |
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Term
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Definition
| Action by company that gives stockholders two or more shares of stock for each they own; reduced individual stock value |
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Definition
| buying stocks by borrowing some of the purchase cost from the brokerage firm |
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Definition
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Definition
| organization that buys stocks and bonds then sellls shares in those securities to the public |
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Definition
| collection of stocks/bonds that are traded on exchanges but are traded more like individual stocks than like mutual funds |
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