Chapter 3 Flashcards

1
Q

operating expenses

A

marketing and selling expenses, general administrative expenses and depreciation expenses

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2
Q

gross profit margin

A

gross profit as % of sales

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3
Q

operating profit margin

A

measure of operating effectiveness in the company

low% - higher costs per dollar sales

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4
Q

net profit margin

A

net income as % of sales

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5
Q

treasury stock

A

firms stock that has been issued and then repurchased by firm

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6
Q

debt ratio

A

percentage of assets that financed by debt

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7
Q

marginal tax rates

A

tax rate that would be applicable to the next dollar of income

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8
Q

assets =

A

assets = liabilities + equity

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9
Q

types of assets

A

current, fixed, other

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10
Q

types of debt (liabilities)

A

current and long term

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11
Q

net working capital

A

companies ability to repairs its debt if it has capital

ratio between current assets:current liabilities needs to be greater than 1

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12
Q

taxable income

A

consists of operation income and capital gains

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13
Q

capital gains

A

gains from selling any asset that is not part of the ordinary operations

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