Unit 6 Flashcards
The financial structure is made up of ____________.
the sources of financing of the company
The sources of financing of a company are ____________.
where the company has obtained the necessary funds to be able to obtain the assets that form its structure.
The two fundamental types of financial sources are ___________.
- Owners/stockholders equity
2. Liability
Owners/stockholders equity is composed of ______________.
financial sources whose ownership corresponds to the owners of the company.
Owners/stockholders equity is characterized by ____________.
not having a determined maturity in time or by having a variable remuneration.
The stockholders equity is made up of ____________.
share capital (fundamentally), subsidies/grants, and (reserves).
The funds that the owners of the company make are called ____________.
share capital
The contributions without right of return made by third parties is called __________.
subsidies/grants
Reserves are _______.
funds earned by the company in the performance of their activities that remain within the company, instead of being returned to the partners.
Liabilities are composed of ______________.
the financial sources whose ownership corresponds to the creditors of the company.
The characteristic of liabilities is _________.
that they have a determined maturity in time and a predetermined remuneration (fixed annuity).
Owners/stockholders equity can be defined as ____________.
the part of the value of the assets of the company that corresponds to the owners
The financial sources that make up the net equity are characterized as _____________.
non enforceable financing
Non enforceable financing means that ___________.
the funds do not have a specific maturity date in
which the company must return the amount originally provided by the owner of the financial source.
Non-enforceable financing can be obtained from two different sources:
- Through external contributions of funds
2. By retaining earnings
External contributions of funds is when ___________ .
the owners or other persons deliver funds to the company without there being a specific date
for the return of those funds.
Within external contributions of funds, we can
differentiate those made by ___________ (capital and reserves contributed) from those made by __________ (grants and donations).
the partners
third parties
When a company retains earnings, they _____________.
decide to retain the net income earned during a period –thereby generating reserves –rather than to distribute it to the stockholders as dividends.
Reserves are ___________.
the net income earned during a period that has been retained.
Dividends are __________.
the net income earned during a period that has been distributed to the stockholders
The Stockholders Equity comprises ______________.
share capital
reserves
grants
Equity financing involves ______________.
using the funds contributed by the owners
stockholders
In stock corporation, _____________
equity is represented by a security called “shares”
The use of shares in securities is done to ______________. Therefore, any investor wishing to recover their investment in the capital of a company may do so by ____________.
make it easier for investors to acquire or sell said shares.
selling that investment to another potential investor.
A share is defined as ______________.
the security that represents one of the equal fractional parts into which the capital stock of a stock company or a corporation is divided.
The concrete portion of a share is obtained by ______________.
dividing the face/nominal value of the share between the total value of the company’s capital stock
The face/nominal value of a share indicates _______________ and is used as ______________.
the amount of the total share capital contributed by
the initial owners to the company.
a basis to determine the rights of the owner of the
share.
The nominal value of a share does not have to be equal (in fact, it is not usually equal) to ___________. Therefore, it is necessary to clearly differentiate which concept we are referring to when we speak of the “value” of a share, since there are several other meanings referring to the term “value” in addition to the nominal value.
the real value of the share
The emission value would be ______________.
the value of the cash that has to be delivered to the company to receive the share at the time of its birth.
The emission value can be ______________.
equal to nominal value or with issue premium (higher than nominal).
The theoretical value or book value is _______________.
the part of the value of the stockholders’ equity of the
company that corresponds to the share.
Book value =
book value = (nominal value / equity) * stockholder’s equity
The economic value, AKA intrinsic or reasonable value of the share is _______________.
the price at which a purchase-sale of the share between two interested and duly informed parties would take place
The price or quotation is ___________.
the amount of money that would be paid to buy the share (or that would be received if sold) in a real transaction of sale.
The price or quotation is the current or market price of the share.
True
The types of shares are:
- Ordinary
- Preferred or privileged
- Repayable
- Gold shares
- Non-voting shares
Ordinary shares are ________. They __________.
the most common shares.
grant the basic set of rights of the share (attendance and vote in General Meeting, dividends, preferential
subscription right, right to participate in the liquidation patrimony, other rights)
The basic set of rights of a share is the right to ___________.
(attendance and vote in General Meeting, dividends, preferential subscription right, right to participate in the liquidation patrimony, other rights)
Preferred or privileged shares are shares that ___________. They are usually ___________. They
are not very common.
grant additional rights.
economic rights as a priority in the dividend or additional dividends.
Preferred or privileged shares are very common.
False
Repayable shares are ______________.
shares with a determined maturity in the issue agreement
Gold shares are ___________.
existing shares in certain companies owned by the State that allow you to have the right of veto over the relevant decisions of these companies
Non-voting shares are ______________. Likewise, they have other privileges such as _______________.
shares that lose the right to vote in exchange for receiving a minimum (no less than 5%) annual, preferential and cumulative dividend.
preference in the liquidation assets or being the last ones affected in case of capital reduction due to losses.
The most common definition of “reserves” is _______________.
the accumulated results (both positive and negative) that the company has obtained over time and that have not been distributed to the owners in the form of dividends
The term “reserves” also applies to ___________, such as contributions made by the partners without any consideration (reserve for share issue premium and other contributions from partners and owners) or ______________ (as in the case of reserves to collect actuarial gains and losses or balance sheet revaluation reserves).
other funds obtained by the company through other means
other reserves to collect certain unrealized expenses or income
contributions made by the partners without any consideration are ____________.
reserves for share issue premium and other contributions from partners and owners
“Reserves” has several advantages:
- It is an internal decision and therefore does not require an agreement with parties external to the company.
- Avoids the entry of new investors in the company.
- It produces a multiplier effect on the company’s financing capacity.
A share issue premium is _______________.
the result of a capital increase in which the
subscribers of the shares must deliver to the company a value higher than the nominal value of the shares issued.
The difference between the value of the assets delivered and the nominal value of the new shares forms _____________. This issue is made to avoid, diluting _____________.
the reserve for the share issue premium
the value of the old shares with the issuance of the new ones
Other contributions from the partners are contributions ___________.
from the partners for specific cases, mainly to compensate for the losses accumulated by the company in previous years.
Grants are ________________. These funds are not repayable, but they ______________. If those conditions are not met, _____________.
funds provided by government agencies, foundations, non profit organizations, or individuals.
usually require the fulfilling of some conditions.
the funds may become refundable
Two types of grants are:
- Current or operating grants
2. Capital grants
Current or operating grants are ______________. This type of subsidy is considered ________________.
grants whose purpose is to influence prices or allow employers to receive a minimum income, as well as to compensate negative exploitation results produced during the year.
an income for the year in which it is received
Capital grants are ____________. Therefore, capital grants are ______________ but a distributable income between all the periods in which the assets acquired are in operation.
grants used to finance specific operations and projects.
not considered an income for the year in which
they are granted
Liability is formed by _____________, whose extinction will require the delivery of valuable assets for the company. It is composed, therefore, by the _______ of the company.
the current obligations of the company
debts
Two types of liabilities are:
- spontaneous liabilities
2. contracted liabilities or debts