Financial Statements
A snapshot of a company's assets, liabilities, and owners equity at a specific point in time.
What is a balance sheet?
Money invested by owners or shareholders into a company.
Assets that last more than a year, like property and equipment. Can't be converted to cash within a year.
What are fixed assets?
A bill that sets out the amount to be paid, what is being paid for, and the terms of payment.
What is an invoice?
A tool to evaluate a company's financial performance by deciding a number by another.
What is a financial ratio?
Also known as a profit and loss statement, summarizes a company's income and expenses over a specific period of time to determine profits and loss.
What is an income statement?
Money borrowed that must be repaid, such as loans or bonds.
What is debt capital?
Assets that can be easily converted to cash within a year.
What are liquid assets?
The total amount of income to be received from outside parties.
What is an account receivable?
Shows the profitability and returns from investments made. Also known as the return on assets ratio.
What is the return on investment ratio (ROI)?
Shows where cash came from and went during a specific period of time.
What is a cash flow analysis statement?
Allows company's to borrow up to a preset limit that can be used at any time.
What is a line of credit?
Assets that cannot be easily converted to cash without significant losses.
What are illiquid assets?
Helps companies improve their short-term cash needs by selling their receivables in return for an injection of cash from the factoring company.
What is factoring?
Measures how well profits are generated from money invested in a business. Expressed as a percentage.
What is return on equity (ROE)?
A list of all accounts used by a business to organize financial transactions.
What is the chart of accounts?
Something of value pledged as security for repayment of a loan, such as property.
What is collateral?
All money in the business accounts, including everything that is in checking, savings, and short-term investment accounts.
What is cash?