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Definition
| Assets with relatively long useful lives that companies use in operating the business. |
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Term
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Definition
| A balance sheet that contains a number of standard classifications and sections. |
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Definition
| Ability to compare the accounting information of different companies because they use the same accounting principles. |
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Term
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Definition
| Use of the same accounting principles and methods from year to year within a company. |
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Term
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Definition
| An accounting principle that states that companies should record assets at their cost. |
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Term
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Definition
| Cash and other resources that companies reasonably expect to convert to cash or use up within one year or the operating cycle, whichever is longer. |
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Term
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Definition
| Obligations that a company reasonably expects to pay within the next year or operating cycle, whichever is longer. |
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Term
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Definition
| A measure used to evaluate a company's liquidity and short-term debt-paying ability; computed as current assets divided by current liabilities. |
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Term
| Debt to total assets ratio |
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Definition
| Measures the percentage of total financing provided by creditors; computed as total debt divided by total assets. |
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Term
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Definition
| A measure of the net income earned on each share of common stock; computed as net income minus preferred stock dividends divided by the average number of common shares outstanding during the year. |
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Term
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Definition
| Assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability). |
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Term
| Financial Accounting Standards Board |
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Definition
| The primary accounting standard-setting body in the United States. |
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Term
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Definition
| Cash remaining from operating activities after adjusting for capital expenditures and dividends paid. |
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Term
| Full disclosure principle |
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Definition
| Accounting principle that dictates that companies disclose circumstances and events that make a difference to financial statement users. |
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Term
| Generally accepted accounting principles (GAAP) |
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Definition
| A set of rules and practices, having substantial authoritative support, that the accounting profession recognizes as a general guide for financial reporting purposes. |
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Term
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Definition
| Assets that do not have physical substance. |
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Term
| nternational Accounting Standards Board (IASB) |
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Definition
| An accounting standard-setting body that issues standards adopted by many countries outside of the United States. |
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Term
| International Financial Reporting Standards (IFRS) |
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Definition
| Accounting standards, issued by the IASB, that have been adopted by many countries outside of the United States. |
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Term
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Definition
| The ability of a company to pay obligations that are expected to become due within the next year or operating cycle. |
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Term
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Definition
Measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.
Working capital = Current Assets - Current liabilities
Current Ratio = Current Assets / Current liabilities |
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Term
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Definition
| Generally, (1) investments in stocks and bonds of other corporations that companies hold for more than one year, and (2) long-term assets, such as land and buildings, not currently being used in the company's operations. |
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Term
| Long-term liabilities (Long-term debt) |
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Definition
| Obligations that a company expects to pay after one year. |
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Term
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Definition
| The average time required to go from cash to cash in producing revenue. |
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Term
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Definition
Measures of the operating success of a company for a given period of time.
EPS = (Net income - Preferred share dividends) / Average Shares outstanding |
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Term
| Property, plant, and equipment |
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Definition
| Assets with relatively long useful lives that companies use in operating the business. |
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Term
| Public Company Accounting Oversight Board (PCAOB) |
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Definition
| The group charged with determining auditing standards and reviewing the performance of auditing firms. |
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Term
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Definition
| An expression of the mathematical relationship between one quantity and another. |
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Term
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Definition
| A technique for evaluating financial statements that expresses the relationship among selected items of financial statement data. |
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Term
| Securities and Exchange Commission (SEC) |
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Definition
| The agency of the U.S. government that oversees U.S. financial markets and accounting standard-setting bodies. |
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Term
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Definition
| The ability of a company to pay interest as it comes due and to repay the balance of debt at its maturity. |
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Term
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Definition
Measures of the ability of the company to survive over a long period of time.
Debt to total assets ratio = Total liabilities / Total assets |
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Term
| Statement of stockholders' equity |
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Definition
| A financial statement that presents the factors that caused stockholders' equity to change during the period, including those that caused retained earnings to change. |
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Term
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Definition
| Information that is available to decision makers before it loses its capacity to influence decisions. |
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Term
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Definition
| Information presented in a clear and concise fashion so that users can interpret it and comprehend its meaning. |
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Term
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Definition
| Information that is proven to be free from error. |
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Term
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Definition
| The difference between the amounts of current assets and current liabilities. |
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