FinMgmt Overview
What is a sole proprietorship?
Business owned by one person
What is a stock?
Ownership in a company
Which financial statement is known as a "snapshot" of firm's position at a specific time.
Balance Sheet
What do Liquidity Ratios measure?
Firm's ability to pay off debt maturing within a year
What is compounding interest?
the final value of cash flow when compounding interest applied
What is the Sarbanes-Oxley Act?
Law that requires CEO to certify the accuracy of financial statements
What is a mutual fund?
Where can I find information about a company's assets and liabilities?
Balance Sheet
What do Asset Management Ratios measure?
How efficiently firm's uses assets
Define Future Value
Amount cash flow grows over given time with compounded interest.
What is one disadvantage/challenge of a partnership?
liability
chance for discord
shared profits
What is the primary benefit of investing in a mutual fund?
Diversity risk
Which report summarizes revenues, expenses & profits?
Income Statement
What is included in the Current Ratio calculation?
Current assets divided by Current liabilities
What are some of the methods used for computing time values of money?
timeline/step-by-step
formula
financial calculator
spreadsheet
What is an advantage of an LLC?
Limited liability, etc.
What is one difference between the NASDAQ and the NYSE?
number of companies that trade
types of companies that trade
Name one section included on the Cash Flow Statement
Operating Activities
Long-term Investing Activities
Financing Activities
Summary
What are some assumptions you can make from the inventory turnover ratio?
Obsolete inventory
Too much inventory
Sales techniques not effective
What is opportunity cost?
Rate of return you could earn on an alternative investment of similar risk.
What is the goal of a corporation?
Maximize shareholder wealth
What is meant by a stock's intrinsic value?
price at which stock would sell if all investors had all knowable information about a stock
What does EBIT stand for?
Earnings Before Income and Taxes
Discuss benchmarking...
Comparing to industry leader; try to emulate.
When determining future value we use compounding; when we find present value we use ____________.
discounting