Test 1 Flashcards
balance sheet
financial statement showing a firm’s accounting value on a particular date
income statement
financial statement summarizing a firm’s performance over a period of time
net working capital
current assets - current liabilities
liquidity
how quickly a company can turn its assets to cash
market value
what is something worth right now
book value
what we bought it for
book value
what we bought it for
total equity / shares outstanding
cash flow from assets
cash flow creditors + cash flow owners
sole proprietorship
A-
- easy to set up
- cheap
- least regulated
- get all profits
D-
- life of company same as person
- limited access to capital
- difficult to sell
- unlimited liability
liquidity ratio
ability of the company to pay off its current liabilities
debt management ratio
- ability to pay long term debt
- how much long term debt does the company have
asset management ratio
how efficiently is the company using its assets to generate sales
profitability ratio
how efficiently is the company using its assets to generate profit
market value ratio
how do we determine the value of the company
partnership
A-
- 2 or more people
- access to capital is easier
- relatively easy to start
- taxed at lower rate
D-
- 2 types of partners- general (management), limited (investor)
- unlimited liabiljity for general partner
- limited liability for limited partner
