Financial Statements & Cash Flow Flashcards

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1
Q

<p>Book Value</p>

A

<p>Corporate Balance Sheet: Assets-Liabilities is the net worth of the business</p>

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2
Q

<p>Capitalized Value (PV of projected flow of income from a business)</p>

A

<p>Capitalized Value = Annual Income/Capitalization Rate</p>

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3
Q

<p>Pro forma Statement</p>

A

<p>projects expected profitability or return of the next years or longer</p>

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4
Q

Emergency Fund Investment Options

A

<ul><li>checking account - one month expenses (not below zero)</li><li>money market</li><li>CD's if close to maturity, less than or equal to 90 days</li><li>savings accounts</li><li>laddered CD,s less than or equal to 6 months</li></ul>

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5
Q

<p>PITI should not exceed</p>

A

<p>28% gross income</p>

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6
Q

<p>Total monthly debt should not exceed</p>

A

<p>36% gross income</p>

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7
Q

<p>Consumer Debt should not exceed</p>

A

<p>20% net income</p>

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8
Q

<p>Liquidity or Current Ratio</p>

A

<p>Current Assets / Current Liabilities</p>

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9
Q

<p>Current Assets</p>

A

<p></p>

<ul><li>cash equivalents</li><li>marketable securities</li><li>accounts receivable</li><li>inventory</li></ul>

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10
Q

<p>Current Liabilities</p>

A

<ul><li>Cash owed</li><li>Accounts Payable</li><li>Credit Card Debt<ul><li>Taxes Payable</li></ul></li></ul>

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11
Q

<p>Serial Payments</p>

A

<p>Allow a client to achieve their goal by making an inflation adjusted payment rather than a fixed payment</p>

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