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common

type of stock that is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings

proxy voting

you cannot attend the shareholders meeting so you authorize another shareholder to vote on your behalf. granting this authority is called

dividends

distributions to shareholders by a corporation

preferred

type of equity security that has a fixed dividend and a priority status over other equity securities

primary

NASDAQ

secondary

this market is best defined by being the market where outstanding shares of stock are resold

dealer

an agent who maintains an inventory from which he or she buys and sells securities is called

broker

an agent who arranges a transaction between a buyer and a seller of equity securities is called a

member

the owner of one of the 1,366 trading licenses for the NYSE is called a

commission broker

the person on the floor of the NYSE who executes buy and sell orders on behalf of the customers is called

specialist

a market maker who acts as a dealer in one or more securities on the floor of the NYSE is called a

floor broker

a - - on the NYSE executes orders on behalf of a commission broker

floor trader

an individual on the floor of the NYSE who owns a trading license and buys and sells for his or her personal account

SuperDOT

electronic system used by the NYSE for directly transmitting orders to specialists

order flow

the stream of customer orders coming in to the NYSE trading floor is called

post

the counter area on the floor of the NYSE where a specialist operates is called

OTC

a securities market primarily comprised of dealers who buy and sell for their own inventories is referred to as which type of market

ECN

a website that allows individual investors to trade directly with one another

corporate shareholders

-- may receive a tax break on a portion of their dividend income

cumulative preferred shares

- - - are more valuable then comparable non-cumulative shares

commission

- brokers work on behalf of brokerage firm clients

shareholders

who owns the NYSE

floor broker

player on the floor of the NYSE can be linked to part-time help because they are called to duty only when others are fully employed

NASDAQ

- is comprised of three separate markets

balance sheet

financial statement that shows the accounting value of a firms equity as of a particular date

Net working capital

= current assets - current liabilities

income statement

financial statement tht summarizes a firms revenues and expenses over a period of time

noncash

- items refers to expenses which do not directly affect cash flows

marginal

the % of the next dollar you earn that must be paid in taxed is the - tax rate

average

the - tax rate is equal to total taxes divided by total taxable income

cash flow from assets

the cash flow of a firm which is available for distribution to the firms creditors and stockholders is called the:

operating cash flow

the term that relates to the cash flow which results from a firms ongoing, normal business activities

free cash flow

cash flow from assets

cash flow to creditors

the cash flow related to interest payments less any net new borrowing is called

cash flow to stockholders

- - - - is defined as the dividend payment less net new equity raised

trademark

classified as an intangible fixed asset

current assets

inventory and cash are - assets

reputation

- is included in a firms market value but excluded from a firms accounting value

current liabilities

note payable to a supplier in 8 months
a/p to a supplier thats due next week

increase

selling inventory at a profit would - the value of a firms net working capital

decrease

a - in the cash balance would decrease net working capital

increase

net working capital - when inventory is sold for cash at a profit

accounts receivable

the most liquid account:
inventory
building
accounts receivable
equipment
land

liquid assets

- - are valuable to a firm

shareholder's equity

- - represents the residual value of a firm

higher

the higher the degree of financial leverage employed by a firm, the - the probability that the firm will encounter financial distress

book value

the - - of a firm is based on historical cost

market value

the - - of a firm
value of management skills, value of firms rep, value of employees experience

GAAP

according the the -, costs of goods sold are recorded based on the matching principal

office salaries

which is most apt to fixed cost?
raw mat
manu wages
mgmt bonuses
office salaries

depreciation

most apt to fixed cost:
product labor cost
depreciation
r/m
utilities
sales commissions

interest expense and depreciation

expenses for accounting purposes

product

the labor costs for producing a product are expensed when the - is sold

marginal tax rate

the - - - for a firm can be either higher or lower than the average tax rate

incremental

a firms tax rate is computed on an - basis

depreciation

- reduces both taxes and net income

income statement

on a - - taxes reduce both net income and operating cash flow

increase, increase

an - in depreciation will - the operating cash flow

decrease in net capital spending

what will increase the cash flow from assets

depreciation

for a tax-paying firm, an increase in - will cause the cash flow from assets to increase

negative cash flow

the firm utilized outside funding would be true if a firm has - - - from assets

increase

a - in depreciation expense will cause: decrease net income, increase the cash flow from assets

interest expense

not included in cash flow from assets:
a/p
inventory
sales
interest expense
cash account

net capital spending

- - - is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense

positive

a - cash flow to creditors represents a net cash outflow from the firm

positive

a - cash flow to stockholders indicates that the dividends paid exceed the net new equity raised

uses of cash

activities of a firm which require the spending of cash are known as

statement of cash flow

the sources and uses of cash over a stated period of time are reflected on the

sales

a common-size income statement is an accounting statement that expresses all of a firms expenses as a percentage of

common-base year statement

standardizes items on the income statement and balance sheet relative to their values as of a common point in time

financial ratio

relationships determined from a firm's financial information and used for comparison purposes are known as:

Du Point identity

formula which breaks down the return on equity into three component parts is

increase in a/p

which is a source of cash?
increase in a/r
increase in a/p
increase in inventory

decrease in common stock

use of cash:
increase in n/p
decrease in inv
dec in a/r
dec in common stock

cash

acquisition of debt is a source of

financing

increase in long-term debt & dividends paid are considered - activities

cogs, decrease in a/p, interest paid

which is considered operating activities:
cogs
decrease in a/p
interest paid
dividends paid

increase, operating

according to the statement of cash flows, a decrease in a/r will - the cash flow from - activities

decrease, operating

according to the statement of cf, increase in interest expense will - the cf from activities

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