Financial Statements
A contra-asset usually found on the left side of the balance sheet
What is accumulated depreciation
This is added back to most cash flow calculations
What is depreciation expense
Even cash payments (or receipts) over a period of time
What is an annuity
Measures how effective a firm is at making profitable invesments
What is Return on Assets
This type of cost leads to increased operating leverage
What is a fixed operating cost
The minimum return required on a cap-ex project
What is the hurdle rate
The problem with self interest
What is the agency problem
The balance sheet equation
What is Assets = Liabilities + Equity
Major activities measured on the SoCF
What are Operating, Investing and Financing?
The expected return in an investments of capital
What is a discount rate
The profitability ratio most pertinent to an equity investor
What is Return on Equity
Overhead is an example of this kind of cost
What is an indirect cost
Includes the cost of acquiring and installing new machinery
What is the Initial Cost
the cost of not doing something else
What is opportunity cost
On the balance sheet: Cash received from issuing stock
What is Paid in Capital
A measure of cash flow after considering capital investments
What is Free Cash Flow
Annual payments (or receipts) made at the beginning of the year
What is an annuity due?
DSO + AAI - AAP
What is the Cash Conversion Cycle?
Costs that are easily traced to a finished product
What is a direct cost>?
A confusing tax depreciation method found on page 112 of the text book
What is MACRS
The impact of one more...
What is margin analysis?
These reduce retained earnings when paid
What is a dividend
What is Operating Cash Flow
The opposite of discounting
What is compounding?
This liquidity ratio excludes the least liquid assets
What is the acid test ratio
The costs fluctuate in accordance with volume
What is a variable cost
Another name for "relevant" inputs on a cap-ex analysis
What are incremental costs
This is King
what is cash
Major activities measured on the SoCF
What are Operating, Investing, and Financing
The first entry on the Statement of Cash Flow
What is Net Income
The discount rate that equates NPV to zero
What is IRR
A measure of indebtedness
What is leverage
Suitable for heterogeneous MFG environment
What is ABC?
How sales of equipment must be handled in calculating cash flow proceeds
What is net of taxes
This is king
What is cash