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69 Cards in this Set
- Front
- Back
GAAP
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Generally Accepted Accounting Principals||Financial Accounting Standards Board||oldAICPA||SEC
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Cash Accounting
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when cash is transferred
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Matching Principle
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revenue, costs, and expenses when they occur
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Balance Sheet
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snap shot
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Income Statement
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revenue, cost, expense and proft
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Cash Flow Statement
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involved or influenced cash but not on income statement
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Sales Allowance
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discretionary discount netted from sales
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Warranty Allowance
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estimated expense recurring
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Cash Discounts/Sales Discounts
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cost of terms offered by the seller for prompt payment-netted from sales
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Perpetual Inventory System
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continuous record of purchased and sold inventory
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FIFO
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increases income reported and taxes paid, assuming rising prices
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LIFO
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decreases income and taxes, assuming rising prices||current cost principle
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Lower of cost or market
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loss on the valuation of inventory expensed
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Freight In
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cost of getting goods to the seller
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Freight Out
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cost of getting goods to the consumer
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Gross Profit/Gross Margin/Gross Income
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Sales-COGS
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Profit Margin
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Selling price-cost/selling price
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Markup
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selling price-cost/cost
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Expenses
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not matched with sales, matched with time period
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Net Income/Net Profit/Earnings/Bottom Line
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gross profit - expenses (after taxes)
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FOB
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free on board/freight on board-point to which shipper pays shipping charges/ownership transfers
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Secured Sale
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exchange for promissory note
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Floor Plan Sale
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financed 3rd party/recourse to seller
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Expenses
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costs that contribute to the creation of revenue
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Expense Allocation
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allocation of General and Administrative expenses to operating units
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Sources of Financial Info
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Ann. Report, 10-K, S&P, Moody's, Value Line, Investors Business Daily
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Contribution Margin/Unit Contribution/Cont. to Overhread and Profit
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selling price-COGS+variables
-fixed=net profit # of units/net profit=unit cont. |
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Expense vs. Capitalize
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charge to current year or spread over useful life
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Depreciation
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must be a useful life of over 1 year
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Book Value
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asset cost-accum. depric.=BV
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Capitalization Policy
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sets a $ below which no depreciation but expense in year purchased
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Income Statement
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revenue and expenses||profit from operations over a period
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Operating Income
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normal business income before irregularities
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EBITDA
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earning before interest, taxes, depreciation and amortization
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Earnings per share
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net income/# of shares
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Balance Sheet
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snapshot||assets-liabilities=net worth or equity
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Current Assets
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cash in next 12 months||cash, equivalents, AR, inventory, pre-paid expenses
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Property, Plant & Equipment
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Fixed Assets or Equipment and Furnishings (cost-accum. deprec.) Land is shown at cost
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Intangible Assets
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soft assets||patents, merger costs, cost-accum. amort.
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Goodwill
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purchase or reorganization asset, amortizes
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Other Assets
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rent or lease deposits, investments in other companies, loans to related companies, loans to owners
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Current Liabilities
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paid in 12 months||AP, Accrued Payroll, Accrued Expenses, Customer Deposits
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Current Portion of Long Term Debt
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due in next 12 months
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Long Term Liabilities
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more than 1 year, Promissory notes, leases, bonds, etc.
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Equity/Owner's Equity/Stockholder's Equity/Capital/Net Assets/Net Worth/ Book Value
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Assets-Liabilities at cost. true net may be more or less than cost
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Capital Stock (Par Value)
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nominal amount paid by investors for stock/not actual amount
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Retained Earnings
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accumulated net income-dividends
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Contributed Capital or Additional Paid-In Capital
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amount over par value paid for stock
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Working Capital
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current assets-current libailities
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Liquidity
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cash and assets quickly converted||quick ratio-like working capital but 90 day cap
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Insolvency
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opposite of liquidity, negative liquidity
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Equity
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value of owner's interests, ties income statement to balance sheet
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General Partner
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active manager
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Limited Partner
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limited liability investor
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Joint Venture
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dissolved after completion of said project
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Corporation
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state chartered legal person with unlimited life, common stock and limited liability ownership
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LLC
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liability based on investment, individual investors pay income tax
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C-corps
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pay corporate taxes (nearly all publicly traded companies)
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S-corps
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like LLCs, investors pay taxes
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Preferred Stock
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paid before common stock, amount of dividend determined by legal agreement
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Book Value per Share
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equity (from BS)/# of shares
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Market Value of Common Stack
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what someone is willing to pay for it
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Market Cap
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# of shares x market price per share
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Liquidation Value
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sold assets-paid liabilities=net value
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Cap Rate
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earnings or cash flow/desired return(Cap Rate)=Company Value
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Cash Cycle/Cash Flow Cycle/Cash Conversion Cycle/Operating Cycle
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time between cash disbursement and cash collection
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Leverage
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using outside investment to make more money than you can with owner's capital
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Accounts Receivable Financing
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pledging AR to lenders in exchange for cash loans
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Cap Expenditures
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amount spent for all fixed assets not charged to expense but on balance sheet. depreciations.
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