Chapter 1-5 Review Flashcards
What are the 2 different stock types?
Common Stock and Preferred Stock
What stock has more advantages and why? Preferred Stock or Common Stock
Preferred Stock has a fixed dividend and gets paid first during bankruptcy.
What is the difference between treasury securities and Corporate Bonds?
A company issues Corporate Bonds while the government issues treasury bonds to raise money.
Definition of Primary Market, Secondary Market, and Dealer Market.
Primary Market - 1st Market to raise money for the first time. (Banks)
Secondary Market - a physical place to buy and sell stocks after they IPO.
Dealer Market - An online place to buy and sell stocks.
Definition of Specialist
A middleman for people to buy and sell stocks to.
Income Statements and Balance Sheet characteristics?
Income Statement - Measured over a period of time. Money in minus money out.
Balance Sheet - Assets = Liabilities + Equity. Measured at a point in the period.
EBIT is also known as?
Operating income. EBIT is earnings before taxes.
What does CAPEX stand for?
CAP - Capital and EX-Expenditures.
Money to buy long-term assets such as machines, Plant, property, and Equipment.
What does PPE stand for?
Plant, Property, and Equipment
What is FCF?
Free Cash Flow is the money left after paying expenses.
Cash Flow from Operations?
Money In or Out from Ongoing, Regular Business Activities
Cash flow from Investing?
Money In or Out from the Purchase or Sale of Long-Term Assets such as buying Heavy Machines or PPE
Cash Flow from Financing?
Money In or Out from Financing activities (borrow, debt, repayment, pay dividends).
What does the Quick Ratio measure?
How liquid a company is.
Liquidity Ratio
Measures liquidation sales when a company is going out of business.
