Ch 6 Flashcards
What is the annual report?
The chairperson‘s description of the firm‘s operating results and a discussion of new developments.
What are the four financial statements on an annual report (typically)?
Balance sheet, income statement, statement of stockholder‘s equity, statement of cash flows
What are three categories of current liabilities?
Accounts payable, notes payable, accruals.
What makes something considered a current liability?
It is expected to be paid in a year.
Common equity is…
The sum of common stock and retained earnings.
What is the balance sheet?
A „snapshot“ of a company‘s financial position on the last day of each year.
What information does the balance sheet provide?
Assets, Liabilities and Equity. (And all that falls under these)
What determines the order of the information shown on the balance sheet?
Assets are listed in order of liquidity.
Liabilities are listed in the order which they must be paid.
A firm has A in total Assets. B in current liabilities, C in long term debt, and D in preferred stock. What is the reported net worth of share holders.
[Total Assets- Total Liabilities]
A-(B+C+D)= net worth of share holders
A firm has 9 in total Assets. 2 in current liabilities, 2 in long term debt, and 3 in preferred stock. What is the reported net worth of share holders.
9-(2+2+3) = 2
Common equity is also called…
Net worth of shareholders
Depreciation applies to _________ assets.
Tangible
Amortization expense applies to _______ assets.
Intangible.
Costs of goods sold include (COGS)…
Labor, raw materials, and other expenses directly related to the production or purchase of the items or services sold in that period.
EBIT
Earnings before interest and taxes
EBITDA
Earnings before interest, taxes, depreciation, and amortization.
EBT
Earning before tax (also known as taxable income)
