Lecture 24 Flashcards
what are the objective of financial statements?
provide info about the financial position, performance and changes in position of enterprise that is useful to wide range of users making economic decisions
what is a balance sheet?
reports on company’s assets, liabilities, and ownership equity at given point in time
what is an income statement?
reports on company’s income, expenses, and profits over reporting period and provides information on the operation of the enterprise
what is a cash flow statement?
reports on company’s cash flow activities, particularly its operating, investing, and financing activities
what are cash equivalents?
money market holdings, short term govt bonds or t-bills
what are marketable securities?
commercial paper
cash equivalents are distinguished from other investments through their..?
short term existence; they mature within 3 months
can common stock be considered cash equivalent?
no, but preferred stock acquired shortly before its redemption date can be
what are trade receivables?
receives owed by the company’s customers
what are non-trade receivables?
amounts due from employees and income tax refunds
what are deferred tax assets?
assets that may be used to reduce any subsequent period’s income tax expensel often associate dwith loss carryover, and is used as a future write-off if next tax period is expected to produce positive earnings
non-current assets are defined as..?
anything not classified as current asset: long term marketable securities; PP&E; Intangible assets; Goodwill
what are intangible assets?
IP; trade secrets, copywrights, patents, trademarks; competitive intangibles (human capital; organizational know-how, collaboration activities)
what is goodwill?
technically intangible asset; typically comes into play only in an acquisition and represents amount of money a company has paid or would pay over book value to acquire another company
what are non-current liabilities?
bank and bondholder debt typically
