F4 Flashcards
corporation
large company or groups of company acting as one unit
are like legal person who can enter contracts, own assets and borrow money
owners are not liable for any obligation
organization
several companies together
sole proprietorship
+-
business is owned and run by one person \+easy to create -no separation between firm and owner -unlimited personal liability -limited life
partnership
more than one owner
all partners are liable for the firm´s debts
limited liability companies
all owner have limited liabilities but can also run business
ownership vs control in corporation
stockholders own the company
board of directors take decision and CEO takes day-to-day decisions
responsibilities for financial manager in corporation
investment decisions
financing decisions
cash management
leverage company
company that finance with depts
goal of corporation
maximize value of shares/ shareholders´ wealth
agency problem and solution
separation of ownership and control -not work hard -hire friends -building empire -taking little risks -moral hazard ->solution: monitoring incentives
other word for investment decision
capital budgeting
other word for financial decision
capital structure
financial structure
four types of financial statements
balance sheet
income statement
statement of cash flows
statement of stockholders’ equity
book value of equity
book value of assets-book value of liabilities
market value of equity
market price per share*number of shares
