Finance Key Terms Flashcards
Financial Management
the art and science of managing a firms money so that it can meet its goals
Financial Planning
Preparing the financial plan which projects revenue, expenditures, and financing needs over a given period
Investment (spending money)
investing the firms funds in projects and securities that provide high returns in relation to their risks
Financing (raising money)
obtaining funding for the firms operations and investments and seeking the best balance between debt (borrowed funds) and equity (funds raised though the sale of ownership in the business)
Commercial Banks
profit oriented financial institutions that accept deposits, make business and consumer loans, invest in government and corporate securities, and provide other financial services
Investment bankers
help companies raise long term financing, firms that act as intermediaries, buying securities from corporations and governments and reselling them to the public
Stockbroker
a person who is licensed to buy and sell securities on behalf of clients
Equity
a form of business financing consisting of funds raised through the sale of stock in a business
Initial Public Offering (IPO)
a companys first sale of stock to the public
Common Stock
a security that represents an ownership interest in a corporation
Dividends
payments to stockholders from a corporations profits
Debt
a form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period
Bonds
long term debt obligations (liabilities) issued by corporations and governments
Interest
a fixed amount of money paid by the borrower (for a loan, mortgage) to the lender (or bondholder) on a regular schedule
Earnings Per Share (EPS)
the ratio of net profit to the number of shares of a common stock outstanding; measures the number of dollars earned by each share of stock
