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Diff types of firms
The corporation
Financial statements
Financial statements
Ratios
100
The shares of a public company are traded on an exchange (or "over the counter" in an electronic trading system) while the shares of a private corporation are not traded on a stock exchange.
What is the difference between a public and private company?
100
A legal entity separate from its owners
What is a Corporation
100
Generally Accepted Accounting Principles
What is GAAP
100
Book Value of Assets - Book Value of Liabilities
What is Book Value of Equity
100
Net Income Sales Total Assets ------------- * ----- * ------------- Sales Tot Assets BV of Equity Net Profit Margin * Asset Turnover * Equity multiplier
What is DuPont Identity
200
Investment Decisions Financing Decisions ?Cash Management
What is Decisions of the Financial Manager
200
Double Taxation
What is taxation for a corporation
200
Neutral third party that checks a ?rm's ?nancial statements
What is an auditor
200
Market Price per Share times Number of Shares Outstanding
What is Market Value of Equity
200
Net Income / Total Assets
What is Return on Assets, ROA
300
Business is owned and run by one person
What is a Sole Proprietorship
300
One potential solution is to tie management's compensation to fi?rm performance.
How should performance for a CEO be measured?
300
Assets=Liabilities+Stockholder's Equity
What is a balance sheet
300
Total Sales/Revenues - Cost of Sales
What is Gross Profit
300
Net Income / Book Value of Equity
What is Return on Equity, ROE
400
Similar to a sole proprietorship, but with more than one owner
What is Partnership
400
day-to-day decision making
What is does a CEO
400
potential investors, Managers and Banks
Who reads financial statements?
400
Pre-Tax Income - Taxes
What is Net Income
400
Market Value of Equity / Book Value of Equity
What is Market-to-Book Ratio
500
All owners have limited liability
What is a limited liability company
500
Elected by shareholders
What is board of directors
500
Current Assets - Current Liabilities
What is net working capital
500
Financing Activities, Investing Activities and Operating Activities
What is Cash flow statement
500
Value of the ?rm if all assets were sold and liabilities paid
What is Liquidation Value