Financial analysis and accounting Flashcards
A document summarizing an individual or
business’s financial position, including assets,
liabilities, and net worth.
Financial Statement
Represents how much of the asset’s value has
been reduced in any given time period.
Depreciation
A document describing a company’s financial
performance and activities
Financial Statements
It is a broad field that encompasses a wide range
of activities, from basic bookkeeping to complex
financial analysis
Accounting
Money generated from average business
operations.
Revenue
Provides estimates and predictions for the
financial figures, including revenue and expense
amounts
Projection
The monetary value a company spends to
produce products and operate the business.
Costs
Expenses that are unrelated to the business’s core
operations
Non-Operating Expenses
This type of cost Includes raw materials, labor,
and expense or distribution costs associated with
producing a product.
Direct Costs
Include wages, salaries, maintenance, rent, taxes,
and depreciation.
Expenses
It is a document that summarizes an
individual or business’s financial position, including
assets, liabilities, and net worth.
Financial Statement
This is a statement of a company’s
financial position at a given period in time. It shows
what a company owns (its assets) and owes (its
liabilities) and the difference between the two
(equity).
Balance Sheet
It is used for reporting a company’s
financial performance over a specific accounting
period by identifying revenue, expenses, gains, and
losses.
Income Statement
A statement that summarizes the
movement of cash in the company.
Cash Flow Statement
Activities that represent the amount of
money that a business earns or loses from making its
goods or services.
Operating Activities
Any sources and purposes of funds
from an organization’s investments like purchasing
new machinery, real estate, or short-term assets like
marketable securities, changes in cash from
investments
Investing Activities
The money received from banks and
investors, as well as the money distributed to
shareholders fall under these activities.
Financing Activities
This is a metric that investors and
management use to assess a company’s financial
health.
Free Cash Flow
An investment’s value can be
determined by looking at the projected cash flows
through this type of cash flow.
Discounted Cash Flow
An analysis technique wherein data
from the current period, such as ratios and line items,
are compared to a base period.
Horizontal Analysis
This is a proportionate analysis in
which each line item is expressed as a percentage of
another item within the statement.
Vertical Analysis
These techniques offer entrepreneurs
a way to evaluate their company’s performance and
compare it to other similar businesses in the same
industry.
Financial Ratios
Used to measure working capital
performance – the money available to meet your
current, short-term obligations.
Liquidity Ratio
It is the amount of assets or liabilitiesthat a company replaces in relation to its sales.
Turnover Ratio
This measures how efficiently and
quickly the business can sell the old stock and replace
it with a new stock of goods.
Inventory Turnover Ratio
It is one of many metrics used to
determine whether a company can stay solvent in the
long term
Solvency Ratio
This ratio shows how much of a
company is funded by equity instead of debt.
Debt to equity Ratio
This ratio shows how much of a
company is funded by equity instead of shareholder funds.
Shareholder Equity Ratio
It ratio metric on how a company
generates profits using available resources over a
given period.
Profitability Ratio
It indicates how long it will take to
recoup the initial cost of a project or investment
Payout Period
It is the gain or loss of an investment
over a certain period of time.
Rate of Return
