Vocab
What is a list of goods sent or services provided, with a statement of the sum due for these; a bill?
Invoice
DEFINE THE TERM Balance Sheet
WHAT IS THE FUNCTION OF AN Equity Capital
It is used to fund the expansion of the business.
What is the capital that a business raises by taking out a loan?
Debt Capital
A company's revenues, expenses and profitability over a period of time.
WHAT IS THE FUNCTION OF Financial Ratios
They offer entrepreneurs a way to evaluate their company's performance and compare it other similar businesses in their industry.
Line of Credit
DEFINE THE TERM Collateral
Something pledged as security for repayment of a loan, to be forfeited in the event of a default.
WHAT IS THE FUNCTION OF Factoring
It is to receive money immediately in exchange.
What determines a company's working capital — the amount of money available to run business operations and complete transactions?
Cash Flow Analysis Statement
DEFINE THE TERM Return on Investment (ROI)
An ROI tells you how much money you've made (or lost) an investment or project after accounting for its cost.
WHAT IS THE FUNCTION OF Return on Equity (ROE)
It's a gauge of a corporation's profitability and how efficiently it generates those profits.
What is an index of all the financial accounts in the general ledger of a company?
What are assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment?
Chart of Accounts
Fixed Assets
DEFINE THE TERMS Cash and Liquid Assets
Cash is money in coins or notes, as distinct from checks, money orders, or credit.
A liquid asset is an asset that can easily be converted into cash in a short amount of time.
WHAT IS THE FUNCTION OF Accounts Receivable
WHAT IS THE FUNCTION OF Illiquid Assets
It is a common account used by company accountants to track revenue earned but not yet collected.
They provide portfolio diversification benefits with a relatively low correlation to the stock market.