Entrep 8-9 Flashcards
This is the energy that keeps your business flowing
Cash
This shows you sales and profits over a period of time
Income Statement
This is a snapshot of your business. It shows your assets and liabilities and net worth at a moment in time.
Balance sheet
This summarizes the cash coming into and going out of it over a specified time frame.
(Calculate a cash balance by subtracting cash disbursements from cash receipts and starting cash.)
Cash Flow statement
This is federal tax that business owners are assessed on wages paid to themselves.
Self Employment Tax
This means that they are overdrawn in one or more
of their bank accounts.
negative cash balance
These are adjustments to asset values not involving cash, such as depreciation and amortization.
Non Cash Expenses
This the value of current assets minus current liabilities.
Working Capital
What is the Cashflow Equation and Its 3 categories?
Cash Flow = Cash on Hand + Cash Receipts − Cash Disbursements
- Operations. Money used to run the business.
- Investment. Money going into (equity) and out of investments in the
business, such as equipment, vehicles, or real estate. - Financing. Debt used to finance the business.
This is a risk of inventory where it is theft of inventory
Pilferage
This is the ability to borrow money
Credit
3 Functions of Cash flow statement in the module
Record all sources of income.
Reporting cash outflows, or necessary disbursements
It shows the net change in cash flow and the ending cash
balance.
This provides cash to companies in exchange for the rights to the cash that will be collected from their customers.
Receivables financing, or factoring
This will help you understand the cash flow required for
investments and the expected impact on operating cash flows.
Capital Budgeting
- When prices rise, a dollar tomorrow will buy less than a dollar does today.
- When you put money into an investment, there is always some risk of losing it.
- When you put money into an investment, you are
giving up the opportunity to use it for what might be a better
investment.
- Inflation.
- Risk.
- Opportunity
This is the pace at which a company must spend capital before generating positive cash flow.
Burn Rate
This is the amount an asset will be worth a number of periods from the present.
Future Value
Money making money, is the essence of investment. This is called?
Compound Interest
This is the act of providing or raising funds (capital) for a purpose
Financing
This is the person or organization that is owed money.
Creditor
This is the amount of risk or threat of loss that an individual is willing to sustain
Risk Tolerance
This is an assessment levied by governments on purchases and collected by merchants
Sales Tax
This is a legal reduction in taxes.
This is a tax credit direct reduction of taxes.
Tax abatements
Tax credits
This is a document agreeing to repay a certain sum of money
(with interest) by a specified date.
Promissory note
This is the promise to pay issued by an individual. (Along with assurance that you’ll take personal responsibility ofc)
Personal Guarantee
is the amount you will have to pay over a given period of time, until the loan is repaid.
Debt Service
This the amount of debt or loan before interest and fees are added.
Principal
This word means that the business is financed by debt,
as opposed to equity
Leveraged
The results of a borrower failing to meet the
repayment agreement on a debt.
Default
This is a loan made against an insurance policy with cash value.
Policy Loan
- An investment instrument representing ownership in an entity (stock) or debt (bond) held by an investor.
- The date at which a loan must be repaid, including when a bond must be redeemed by the issuer.
- Security
- Maturity
5 c’s of Credit
- Collateral
- Character
- Capacity
- Capital
- Conditions
This is a wealthy individual who invests in businesses.
Angel Investor
This is the record of how reliably and punctually you have repaid past loans.
Credit History, obtained through Credit Reporting Agency
This is credit extended by a company allowing qualified customers
to make purchases up to a specified limit, without paying
cash at the time of purchase.
Charge Account
The time between a payment transaction and when the cash is actually in the payee’s account.
Float
financing a business by creatively stretching existing capital as far as possible, including extensive use of the entrepreneur’s time.
Bootstrap Financing
A single unit of corporate stock.
Share
- Shares of company ownership (equity).
- Loans (debt) made to companies or government entities for more than one year.
- Savings accounts, Treasury bills, or other investments that can
be liquidated (turned into cash) within 24 hours.
- Stocks.
- Bonds.
- Cash.
