Chapter 3 Flashcards
Depreciation
charge to reflect the cost of assets depleted in the production process; no actual cash is involved
amortization
same as depreciation but for intangible items
EBITDA
earnings before interest, taxes, depreciation and amortization
What is the difference btw a balance sheet and income statement?
A BS shows a snapshot IN time and an IS reports on ops OVER A PERIOD OF TIME
How is the IS tied to the BS?
Retained Earnings
What is managements goal?
to maximize the price of the firms stock and the value of any asset
Statement of Cash Flows
shows how items that affect the BS and IS affect cash flows
What does Stock Holders Equity show?
the amount stockholders paid the co when shares were purchased and the amount of earnings the co has retained of the years
net working capial
current assets- current liabilities
net operating working capital
current assets-(CL-NP)
Total Debt
short term debt+long term debt
total liabilities
total debt + (AP+accruals)
income statement
reports on ops (rev, exp, profits) over a period of time
EBIT- operating income
Earnings before interest and taxes
Earnings per share (EPS)
net income/shares outstanding
