Vocabulary 1
Money and other resources the owners have invested in a business.
Owner's Equity
Items of value owned by a business.
Assets
A financial document that reports Net Income and Net Loss
Income Statement
Assets that are easiest to convert to cash.
Current Assets
Current Assets/Current Liabilities
Current Ratio
People who own stock in a company.
Stockholders
Any amount a business owes.
Liabilities
Net Income that is reinvested into the company.
Retained Earnings
Assets=Liabilities+Owner's Equity
Accounting Equation
Sales/Inventory
Inventory Turnover
Amount of products on hand.
Inventory
A system used to record, classify, summarize, and interpret the financial data of a business.
Accounting
A financial document that reports the total in assets, liabilities, and owner's equity accounts.
Balance Sheet
Ideal Current Ration
1.5-3
Long-Term Liabilities/Owner's Equity
Debt-to-Equity
The degree of uncertainty involved with an investment.
Any activity that has an effect on the financial situation of the business.
Transaction
Revenues-Expenses
Net Income
What stakeholders have a claim to the equity of a business?
Company Owner
Stockholders
Bondholders
Net Profit/Gross Revenue
Net Profit Margin
Amount of gain or loss an investment yields over a specified time.
Return
Payments to a company's shareholders.
Dividends
Sales made where payment has not yet been received but is expected.
Accounts Receivable
A weather forecast is to vacation planning as a _____ is to financial planning.
Financial Forecast
Net Profit/Total Assets
Return on Investment