Net Worth Flashcards
Asset
Physical or financial property that has value and is owned by a business or individual
Balance Sheet
A financial report summarizing the assets liabilities and equity of a business at a point in time.
Current Asset
Assets normally used up or sold within a year
Current Liability
Liabilities normally paid within a year
Current Ratio
The ratio of current assets to current liabilities
Debt/Asset Ratio
The ratio of total liabilities to total assets
Liabilities
Financial obligations (debts) that must be paid at some future time.
Liquidity
The ability of a business to meet its cash financial obligations as they come
Net Worth
The difference between value of the assets owned by a business and the value of its liabilities
Noncurrent Asset
An asset that will normally be owned or used up over a period longer than a year
Noncurrent Liability
A Liability that will normally be paid over a period longer than a year
Owner Equity
The difference between the total value of the assets of a business and the total values of its liabilities
Ratios
An analysis tool to help measure the size of liquidity and solvency problems relative to the business size.
Solvency
The degree to which the liabilities of a business are backed up by its assets
Working Capital
The difference in value between current assets and current liabilities
