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Accounting > Exam 3 > Flashcards

Exam 3 Flashcards

1
Q

Net Profit Margin

A

Net income/sales

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2
Q

Market to book value

A

Market capitalization/book value

#of shares outstandingxshare price)/(Assets-Liabilites

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3
Q

Working capital

A

Current assets-current liabilities

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4
Q

Current ratio

A

Current ratio/current liabilities

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5
Q

Debt to equity

A

Total liabilities/total equity

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6
Q

Return on assets (short)

A

Net income/average total assets

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7
Q

Return on assets (long)

A

Net profit margin x total asset turnover

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8
Q

Fixed asset turnover ratio

A

Net sales/Average net fixed assets

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9
Q

Price to earnings ratio

A

Market value per share/Earnings per share

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10
Q

Return on equity

A

Net income/stockholders equity

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11
Q

Gross profit

A

Sales-COGS

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12
Q

Gross Profit Margin

A

Sales-COGS/Sales

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13
Q

EPS

A

Net income/average number of shares outstanding

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14
Q

The declaration and payment of a cash dividend

A

Reduces both assets and retained earnings by the amount of the dividend

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15
Q

Cash flows from operating

A

Related to production and delivery of goods and services, interest expense, interest income

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16
Q

Cash flowsfrom investing

A

Puchasing amd disposing of long term assets, investments, loans to others

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17
Q

Cash flows from finacing

A

Issuing or buying back stocks or bonds, paying dividends, borrowing cash

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18
Q

Additional paid in capital

A

(Sales price x number of shares sold)-common stock at par

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19
Q

Common stock at par

A

Par value x number of shares sold

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20
Q

Accrued liabilites

A

Onligations related to expenses that have been incurred but will not be paid until the subsequent period

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21
Q

When should accrued liabilites be recodered

A

When earned

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22
Q

Calculate interest

A

Principal x interest rate x time

23
Q

Contingent liabilites

A

Potential liablities; may or may not become an actually liability

24
Q

Account for probably measurable contigent liablility

A

Arrrue loss on income statement and balance sheet

25
Q

Accounting for probably not measurable

A

Disclose in footnotes

26
Q

Accounting for reasonably possible measureable and not measurable

A

Disclose in footnotes

27
Q

Accounting for remote

A

Do nothing

28
Q

Annuities

A

Equal amount of money for interest for each period, interest period of equal length, equal interest rate for each period

29
Q

Bonds

A

Are securities issued by a firm to others to get large amounts of cash

30
Q

Bond issuer

A

Firm selling bond to borrow money

31
Q

Bondholder

A

The owner of the bond

32
Q

Face value/par value/principal amount

A

Amount to be paid at maturity by the issuer to the holder

33
Q

Stated rate of interest/cupon rate/contract rate/nominal rate

A

Interest rate used to calculate interest payment made periodically by issuer to holder

34
Q

Cupon payment

A

Periodic interest payment

Stated rate x face value

35
Q

Market rate of interest/yield/effective interest rate

A

The interest rate the market demands on the bond

36
Q

Bonds sold at discount if

A

Stated rate is less than market rate

37
Q

Bonds sold at premium if

A

Stated rate is greater than market rate

38
Q

To determine discount

A

Use market rate

39
Q

Amortization of discount does what to balance?

A

Increases

40
Q

Discount does what to netbook value

A

Decreases

41
Q

Present value of annuity to calculate what?

A

Interest

42
Q

Present value to calculate

A

Selling price

43
Q

Amortization of premium does what to balance

A

Decreases

44
Q

What is used to calculate interest expense

A

Market rate

45
Q

Premium does what to net book value

A

Increases

46
Q

Issuance of no par value common stock

A

Increase common stock for the total amount raised

47
Q

Treasury stock

A

Stock that the issuing firm reaquires from existinf shareholders

48
Q

Preferred stock

A

Pay a fixed dividend ratio

49
Q

Cash flows equation

A

(All change in)

Cash=liabilites-noncash assets+equity

50
Q

Why use ESO

A

Alliging incentives, conserve cash, used to be accounting friendly

51
Q

Intrinsic value of the ESO

A

Stock price- exercise price

52
Q

US GAAP

A

More standards, less flexibility, rules based

53
Q

IFRS

A

Fewer standards, more choices, principals based

Accounting (30 decks)

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