Accounting Basics
Something the company 'owns' and recieves cash flow from.
What is economies of scale?
Economies of scale refer to the cost advantages that a business gains when it increases its level of production.
What is cash flow?
Cash flow is the incoming and out going of cash in a business.
What is a liability?
Something the company needs to 'pay off' and causes cash outflow.
Whats a variable cost?
Costs that change with the size of production.
What is time value for money?
The dollar's worth today is more than a dollar's worth tomorrow
What is the accounting equation?
Assets = Equity + Liability
Are demand and price inversely or directly proportional?
Inversely proportional.
What is present value of money?
The future cash flows discounted to present value.
What is equity?
Investment made by the owners of the company.
Whats a fixed cost?
Costs that dont change even when the size of production changes
What is a coupon?
The fixed regular return on a bond.
How many financial statements are there, and which ones?
3- Income Statement, Balance sheet, and Cash flow Statement
What is the difference between internal economies of scale and external economies of scale?
Internal economies of scale happen inside a single company due to its own growth, while external economies of scale happen outside the company because the entire industry or region grows.
What is a principle?
The money you paid for the bond.