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C214 wgu > Overview of Finance > Flashcards

Overview of Finance Flashcards

1
Q

Treasury Securities

A

Example is BOND issued by Fed Govt. to raise money

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2
Q

Bond

A

also a Debt, similar to loans used by city governent to build schools, roads

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3
Q

Preferred Stock

A

Also called Hybrid, paid first during bankruptcy, pays dividends in arrears

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4
Q

Primary Stock

A

First Market to raise capital. Wells Fargo, Bank of America

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5
Q

IPO

A

Initial Public Offering- first time stocks and bons are sold to raise money in Primary Market

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6
Q

S-1

A

PROSPECTUS/ contains business info address, board of directors FINANCIAL OVERVIEW OF COMPANY REQUIRED FOR IPO

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7
Q

Secondary Market

A

After the 1st marlet example: :NYSE buy and sell stocks and bonds after IPO NYSE is the largest market

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8
Q

Dealer Martket

A

No physical location, National Association of Securities Dealers Automated Quotations (NASDAQ) is an example

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9
Q

Auction Market

A

NYSE is an example buy and sell stocks and bonds

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10
Q

Risk

A

Potential loss or gain of a transaction UNKNOWN FACTOR

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11
Q

Income Statements

A

Measured over a period Jan-Dec

Revenue-Expenses

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12
Q

Balance Sheet

A

Assets=Liabilities+Equity

Own=Owe+Stock buy in my company- Measured at a point in a period

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13
Q

Statement of cash flows

A

flow = direction of cash

cash in coming in or leaving

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14
Q

Accounting

A

business function responsible for creating and recording of financial information

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15
Q

Net Income

A

Company FINAL INCOME. after deducting tax

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16
Q

EBIT

A

Earnings before interest and tax

OPERATING INCOME

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17
Q

Operating Income

A

Sales - Operating Expense

18
Q

Operating Expense

A

Rent Salaries, Depreciation

19
Q

Interest Ezpense

A

Interest the BANK charges on the money you owe DEBT

20
Q

CAPEX

A

CAP is for Capital

EX is for expenditures money spend on long term assets such as Machines, plant, property, PPE

21
Q

NWC

A

net working capital Current assets-current Liabilities looking at the funds at hand to keep the business running

22
Q

FCF

A

Free Cash Flow leftover cash after bills and taxes are paid

23
Q

Ratio Analysis

A

compare financial relationship sales=4 expense=2 ratio is 4/2=2 SALES ARE twice my expense

24
Q

annuity

A

recurring payment same payment same collection each time of the year/month

25
Q

Ordinary annuity

A

paid at the END Credit card end of 30 days

26
Q

annuity due

A

due at the beginning APARTMENT

27
Q

APY and effective yield

A

annnual interest rate including compounding APR is used to calculate APY

28
Q

Par Value

A

Face Value $1000

29
Q

YTM

A

yield to maturity current yield, amount made from the purchase date of the bond to its maturity or end Ex) if the coupon rate is 4%x$1000 FV Par Value the value of the bond is $40. At the end of 1 year the price of the martket is $1150. 40/1150=3.5% THE HIGHER THE PRICE AT MATURITY the lower the yield

30
Q

Discounting

A

Bring money to PRESENT VALUE FV+500 in one year PV is $476.19 you just discounted $500

31
Q

Required Rate of Return

A

another name for discount rate- minimum return an investor requires to invest in an asset. the rate you want for investing your money into the asset based on the risk involved

32
Q

Gordon Growth Model

A

Stock held BEYOND 1 Year

33
Q

Beta

A

Systematic Risk of a type of stock. risk of bread as price changes in the whole grocery store

34
Q

Idiosyncratic risk

A

particular to your company, controllable risk. Delta Airline can buy fuel from different vendor if the price is too high from the main vendor

35
Q

Dodd-Frank Act DFC

A

federal law created to regain control of financial institutions by the federal gov after 2008 meltdown

36
Q

Volcker Rule VRL

A

Limits hedge funds and proprietary trading

37
Q

Sarbanes Oxley SOXF

A

regulation protect investors from fraud

38
Q

S-1

A

Prospectus filed by SEC submitted by firms desiring to sell public securities

39
Q

Form 10-Q

A

public firms submit quaterly to SEC

40
Q

Rule 144A

A

Safe harbor protection not regulated by SEC PRIVATE CAPITAL to ACCREDITED INVESTORS

41
Q

Reg-S

A

safe harbor protection NOT REGULATED BY SEC allows NON-US investors to invest in a US Company PRIVATE CAPITAL MARKET

C214 wgu (1 decks)

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