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business 1201 > Final Exam: Ch 11 > Flashcards

Final Exam: Ch 11 Flashcards

1
Q

an obligation, such as a loan or bond that is paid back with interest

A

debt

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2
Q

providing a portion of the business in exchange for financing

A

equity

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3
Q

banks bring different parties together, such as savers and borrowers

A

financial intermediary

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4
Q

a asset of value, be used to secure the loan

A

collateral

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5
Q

larger business issuing debt, called commercial paper or a bond

A

corporate debt

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6
Q

represent ownership of a part of a business

A

stock

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7
Q

to make sure a business has proper funding

A

corporate finance

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8
Q

method of bringing cash that happens in the future, such as revenues 12 years from now and making it equivalent to present value of today’s money

A

net present value

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9
Q

measure of the current assets that are available to meet a business’ current liabilities, which are due less than a year

A

liquidity

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10
Q

loan that the business can use at some time in the future, acts as a credit card for expenses that the business believes might happen but doesn’t have enough info for a formal loan

A

line of credit

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11
Q

part of US federal government so loans can have lower interest rate, lower down payments, and lower collateral requirements

A

Small Business adminstration

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12
Q

for longer-term financing that be from 9 months to as long as 30 years

A

bonds

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13
Q

another source of funding, someone that invests their money into the business and takes on responsibility for managing and running the company

A

partners

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14
Q

funding that is provided by investors to a start-up earlier than other investors would, typically individuals, family members, friends, wealthy individuals

A

angel investing

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15
Q

funding that comes from another company, such as venture capital firm, a university funding a research idea to bring it to life

A

venture capital

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16
Q

primary path for financing is raising equity by issuing stocks

A

equity investments

17
Q

make sure a business has proper financing

A

corporate finance

18
Q

predicts what is coming in the future and what will be required

A

forecasting

19
Q

first step in forecasting process to establish what is currently happening

A

baseline

20
Q

internal actions that the business take to increase its revenues

A

drivers

21
Q

something that is out of the direct control of the business, but they still must be planned for when possible

A

draggers

22
Q

find the quantity of sales that are needed so that revenues are greater than the expenses, making the investment a driver

A

break-even analysis

23
Q

the total cost of the investment is equal to the total revenues, piece of info to help forecasting

A

quantity break even point (qbep)

24
Q

owners of a business, have a responsibility to their investors and shareholders to take care of the business and to explore all options and how they can impact the business

A

fiduciary duties

25
Q

a measure of how much money a person has

A

net worth

26
Q

what happens when debt begins to increase when debt is being reduced as well

A

snowballing

27
Q

interest on a deposit or loan based on the initial principal and the accumulated interest from earlier periods

A

compounding interest

28
Q

where shares of publicly traded companies are bought and sold

A

stock markets

29
Q

when stock market goes up in value

A

bull market

30
Q

when the stock market has several periods when it declines, warning that you might lose money in the short-term

A

bear market

31
Q

selecting of different investment types to balance risk

A

asset allocation

32
Q

____ is an obligation that is paid back with interest

A

debt

33
Q

____ is providing a portion of the company in exchange for financing

A

equity

34
Q

Banks may require ____ to secure a loan.

A

collateral

35
Q

Commercial paper is good for between ____.

A

one day and nine months

36
Q

A line of credit ____.

A

a loan for the future

37
Q

____ is a method of bringing cash that happens in the future to today’s value.

A

net present value (NPV)

38
Q

____ is a measure of the current assets that are available to meet a business’ current liabilities

A

liquidity

business 1201 (5 decks)

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