Study sets matching "finance chapter 2"

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Study sets matching "finance chapter 2"

6 terms
Finance Chapter 2
Capital flows
3 Ways to Transfer Money
Primary Market
Secondary Market
From supplier/saver to demanders
1) Direct Transfers... 2) Indirect transfers through investment…
Where new securities are offered for sale for the first time
Where securities trade after they have been issued in the pri…
Capital flows
From supplier/saver to demanders
3 Ways to Transfer Money
1) Direct Transfers... 2) Indirect transfers through investment…
67 terms
Finance Chapter 2
2-1. What four financial statements ca…
2-2.Who reads financial statements? Li…
2-4. Consider the following potential…
a.Global used $20 million of its avail…
In a firm's 10-K filing, four financial statements can be fou…
Investors. Investors are concerned with the risk inherent in…
...
Long-term liabilities would decrease by $20 million, and cash…
2-1. What four financial statements ca…
In a firm's 10-K filing, four financial statements can be fou…
2-2.Who reads financial statements? Li…
Investors. Investors are concerned with the risk inherent in…
36 terms
Personal Finance Chapter 2
annuity
assets
balance sheet
budget
A fixed sum of money that occurs annually.
Items that one owns.
A financial statement that describes a person's financial pos…
A detailed financial report that looks forward, based on expe…
annuity
A fixed sum of money that occurs annually.
assets
Items that one owns.
17 terms
Personal Finance Chapter 2
Internship
aptitudes
networking
potential earning power
A position in which a person receives training by working wit…
Natural abilities.
A way of making and using contacts to get job information and…
The amount of money you may earn over time.
Internship
A position in which a person receives training by working wit…
aptitudes
Natural abilities.
20 terms
Personal Finance Chapter 2
Job
Career
Standard of living
Trends
Work you complete to earn money
Commitment to work in a field you enjoy
Measure of quality of life
A general direction where something is developing or changing
Job
Work you complete to earn money
Career
Commitment to work in a field you enjoy
5 terms
Personal Finance Chapter 2
compound interest
emergency fund
interest rate
Five Foundations
interest paid on interest previously earned
$500 in readily available cash to be used on in the event of…
% paid to a lender for use of borrowed money (in debt) OR % e…
The five steps to financial success
compound interest
interest paid on interest previously earned
emergency fund
$500 in readily available cash to be used on in the event of…
Finance Chapter 2
Saving-investment cycle
Surplus spending units
Deficit spending units
Brokers
The actual savings for a given period of time must equal the…
Net savers
Net investors
Bring together buyers and sellers of securities
Saving-investment cycle
The actual savings for a given period of time must equal the…
Surplus spending units
Net savers
15 terms
Personal Finance ~ Chapter 2 Vocabulary
Identity
Values
Lifestyle
Aptitude
Who a person is and how they fit in.
The ideals in life that are important to you.
The way people choose to live their lives, based on the value…
A natural physical or mental ability that allows you to do ce…
Identity
Who a person is and how they fit in.
Values
The ideals in life that are important to you.
14 terms
Personal Finance: Chapter 2
Interest
Simple interest
Compound interest
Annuity
The rent charged for the use of money
Interest on a loan computed as a percentage of the loan amoun…
The process of earning interest on interest.
The payment of a series of equal cash flow payments at equal…
Interest
The rent charged for the use of money
Simple interest
Interest on a loan computed as a percentage of the loan amoun…
21 terms
Finance - Chapter 2
Spot markets
Futures markets
Money markets
Capital markets
The markets in which assets are bought/sold for "on-the-spot"…
Markets in which participants agree today to buy/sell an asse…
Financial markets in which funds are borrowed or loaned for s…
Financial markets for stocks and for intermediate- or long-te…
Spot markets
The markets in which assets are bought/sold for "on-the-spot"…
Futures markets
Markets in which participants agree today to buy/sell an asse…
19 terms
Personal Finance: Chapter 2
assets
balance sheet
budget
budget variance
Cash and other property with a monetary value.
A financial statement that reports what an individual or a fa…
A specific plan for spending income; also called a spending p…
The difference between the amount budgeted and the actual amo…
assets
Cash and other property with a monetary value.
balance sheet
A financial statement that reports what an individual or a fa…
31 terms
Finance Chapter 2
balance sheet
Assets
Liabilities
Shareholders equity
A snapshot of a firm, A financial statement that reports asse…
Economic resources (things of value) owned by a firm.... Current…
u know what dis is
Common Stock; Additional Paid in Capital; Preferred Stock; (T…
balance sheet
A snapshot of a firm, A financial statement that reports asse…
Assets
Economic resources (things of value) owned by a firm.... Current…
Finance Chapter 2 Ratios
Working Capital
Operating Cash Flow
Change In working Capital
Capital Spending
Current Assets - Current Liabilities
EBIT+ Depreciation - Taxes
End Working Capital - Beginning Working Capital
End Net Fixed Assets- Beginning Net fixed assets + Depreciation
Working Capital
Current Assets - Current Liabilities
Operating Cash Flow
EBIT+ Depreciation - Taxes
12 terms
Personal Finance Chapter 2: Saving
compound interest
emergency fund
interest rate
Five Foundations
interest paid on interest previously earned
find hundred dollars in readily available cash to be used onl…
percentage paid to a lender for the use of borrowed money (in…
the five steps to financial success
compound interest
interest paid on interest previously earned
emergency fund
find hundred dollars in readily available cash to be used onl…
40 terms
Principles of Finance - Chapter 2
3 different business transfers
Direct transfers
Underwrites
Financial intermediary
1) direct transfers 2) underwrites 3) financial intermediary
(money and securities) occur when a business sells its stocks…
transfers may also go through an investment bank (iBank) such…
a bank, an insurance company, or a mutual fund. Here the inte…
3 different business transfers
1) direct transfers 2) underwrites 3) financial intermediary
Direct transfers
(money and securities) occur when a business sells its stocks…
12 terms
Finance Chapter 2
What does the balance sheet contain?
Asset Liquidity order
What value is on the balance sheet?
Corporations in the US pay taxes on wh…
Assets (left side), liabilities (right side), and equity (rig…
Cash... Accounts receivable... Inventory... Fixed Assets
Book value
Graduated - the more money you make, the higher taxes you pay
What does the balance sheet contain?
Assets (left side), liabilities (right side), and equity (rig…
Asset Liquidity order
Cash... Accounts receivable... Inventory... Fixed Assets
33 terms
Finance 3000 Chapter 2
balance sheet
financial statement
liquidity
current assets
the financial statement that reports a firms assets, liabilit…
statement that provides an accounting-based picture of a firm…
the ease of conversion of an asset into cash at a fair value
assets that will normally convert to cash within one year
balance sheet
the financial statement that reports a firms assets, liabilit…
financial statement
statement that provides an accounting-based picture of a firm…
10 terms
Personal Finance Chapter 2
Compound Interest
Emergency Fund
interest rate
Five Foundations
interest paid on interest previously earned; credited daily,…
five hundred dollars in readily available cash to be used onl…
percentage paid to a lender for the use of borrowed money (in…
the five steps to financial success
Compound Interest
interest paid on interest previously earned; credited daily,…
Emergency Fund
five hundred dollars in readily available cash to be used onl…
Personal Finance Chapter 2
Interest Rate
Sinking Fund
Compound Interest
Emergency Fund
A rate which is either charged or paid for the use of money
Saving money over time for a large purchase
Interest paid on interest previously earned
A savings account that is set aside to be used only for emerg…
Interest Rate
A rate which is either charged or paid for the use of money
Sinking Fund
Saving money over time for a large purchase
25 terms
Finance Chapter 2
Balance Sheet
Net working capital
Liquidity
Financial Leverage
Financial statement showing a firm's accounting value on a pa…
Current assets less current liabilities
Refers to the spread and ease with which an asset can be conv…
The use of debt in a firm's capital structure. Increases the…
Balance Sheet
Financial statement showing a firm's accounting value on a pa…
Net working capital
Current assets less current liabilities
Corporate Finance Chapter 2
Financial Institution
Commercial Banks
Investment Banks
Glass-Steagall Act
An intermediary that channels the savings of individuals, bus…
Institutions that provide savers with a secure place to inves…
Institutions that assist companies in raising capital, advise…
An act of Congress in 1933 that created the federal deposit i…
Financial Institution
An intermediary that channels the savings of individuals, bus…
Commercial Banks
Institutions that provide savers with a secure place to inves…
5 terms
Personal Finance Chapter 2
Compound Interest
Emergency Fund
Interest Rate
Five Foundations
Interest paid on interest previously earned; credited daily,…
Five hundred dollars in readily available cash to be used onl…
Percentage paid to a lender for the use of borrowed money; pe…
The five steps to financial success
Compound Interest
Interest paid on interest previously earned; credited daily,…
Emergency Fund
Five hundred dollars in readily available cash to be used onl…
Personal finance chapter 2
Calculation for net worth
Insolvency
Cash flow statement (personal income o…
discretionary income
Items of value-amounts owed=net worth
The inability to pay debts when they are due because of liabi…
A financial statement that summarizes cash receipts and payme…
money left over after paying for housing, food, and other nec…
Calculation for net worth
Items of value-amounts owed=net worth
Insolvency
The inability to pay debts when they are due because of liabi…
Personal Finance Chapter 2
Compound Interest
Emergency Fund
Interest Rate
Five Foundations
interest paid on interest previously earned
$500 in readily available cash to be used only in the event o…
percentage paid to a lender for the use of borrowed money
the 5 steps to financial success
Compound Interest
interest paid on interest previously earned
Emergency Fund
$500 in readily available cash to be used only in the event o…
Personal Finance Chapter 2
Car Loan
Credit Card
Credit Score
Debt Collector
a short-term, personal loan to purchase a car; monthly paymen…
a plastic card used to buy goods or services using debt
an assigned number to signal to lenders a persons ability to…
someone who collects debts owed to others
Car Loan
a short-term, personal loan to purchase a car; monthly paymen…
Credit Card
a plastic card used to buy goods or services using debt
75 terms
International Finance Chapter 2
D
C
B
D
Recently, the U.S. experienced an annual balance of trade rep…
A high home inflation rate relative to other countries would…
If a country's government imposes a tariff on imported goods,…
____ purchases more U.S. exports than the other countries lis…
D
Recently, the U.S. experienced an annual balance of trade rep…
C
A high home inflation rate relative to other countries would…
Chapter 2 Foundations in Finance
Compound Interest
Emergency Fund
Five Foundations
Interest Rate
Interest paid on interest previously earned, credited daily,…
Five hundred dollars in readily available cash to be used onl…
Save $500... Get out of debt... Pay cash for your car... Pay cash for…
Percentage paid to the lender for the use of borrowed money (…
Compound Interest
Interest paid on interest previously earned, credited daily,…
Emergency Fund
Five hundred dollars in readily available cash to be used onl…
46 terms
Finance Chapter 2
Balance Sheet
Assets.
Fixed asset
Current asset
is a snapshot of the firm. It is a convenient means of organi…
listed on the left side of balance sheet and are classified a…
is on that has a relatively long life. Can be tangible such a…
has a life of less than one year. This means that the asset w…
Balance Sheet
is a snapshot of the firm. It is a convenient means of organi…
Assets.
listed on the left side of balance sheet and are classified a…
61 terms
Chapter 2 Finance
Analysis of Financial Statements
2-1 FINANCIAL REPORTS (pg.19)
-Annual Report (pg.19)
2-2 FINANCIAL STATEMENTS (pg.19-27)
In this chapter, we discuss how to evaluate a firm's current…
The financial statements indicate what actually happened to t…
A report issued by a corporation to its stockholders that con…
...
Analysis of Financial Statements
In this chapter, we discuss how to evaluate a firm's current…
2-1 FINANCIAL REPORTS (pg.19)
The financial statements indicate what actually happened to t…
Finance Chapter 2
finance/ financial statements
balance sheet
assets
5 examples of current assets
-about the future, looks at market value, finance is the valu…
-provides a snapshot of the firm's status (in assets and liab…
-use of funds... -current= short term investments, last 30-60 da…
1. cash and marketable securities= hold cash in reserve to ke…
finance/ financial statements
-about the future, looks at market value, finance is the valu…
balance sheet
-provides a snapshot of the firm's status (in assets and liab…
14 terms
Finance 2000 - Chapter 2
financial market
primary market
secondary market
fixed income market
Markets in which securities are issued and traded.
Market for the sale of newly issued securities.
Market in which previously issued securities are traded among…
Market for debt securities.
financial market
Markets in which securities are issued and traded.
primary market
Market for the sale of newly issued securities.
Finance chapter 2
GAAP
Financial Accounting standard board (F…
Public Company Accounting Oversight Bo…
Securities and Exchange Commission (SEC)
the practice and procedure guidelines used to prepare and mai…
the accounting profession's rule-setting body, which authoriz…
A not-for-profit corporation est by the Sarbanes Oxley Act of…
the federal regulatory body that governs the sale and listing…
GAAP
the practice and procedure guidelines used to prepare and mai…
Financial Accounting standard board (F…
the accounting profession's rule-setting body, which authoriz…
Chapter 2 Finance Terms
balance sheet
net working capital
Liquidity
assets
financial statement showing a firms accounting and economic v…
difference betweena firms current assets and current liabilit…
speed and ease with which an asset can be converted to cash
...
balance sheet
financial statement showing a firms accounting and economic v…
net working capital
difference betweena firms current assets and current liabilit…
11 terms
Finance Chapter 2
balance sheet
net working capital
Generally Accepted Accounting Principl…
noncash items
financial statement showing a firm's accounting value on a pa…
current assets less current liabilities
the common set of standards and procedures by which audited f…
expenses charged against revenues that do not directly affect…
balance sheet
financial statement showing a firm's accounting value on a pa…
net working capital
current assets less current liabilities
14 terms
Finance chapter 2 terms
10-k
10-q
balance sheet
book value
form to send financial statements with the U.S securities and…
form to send financial statements with the U.S securities and…
statement of financial position, lists assets and liabilities
value shown in a firm's financial statements
10-k
form to send financial statements with the U.S securities and…
10-q
form to send financial statements with the U.S securities and…
21 terms
Finance Chapter 2
Spot Markets
Futures Markets
Money Markets
Capital Markets
The markets in which assets are bought or sold for "on-the-sp…
The markets in which participants agree today to buy or sell…
The financial markets in which funds are borrowed or loaned f…
The financial markets for stocks and for intermediate or long…
Spot Markets
The markets in which assets are bought or sold for "on-the-sp…
Futures Markets
The markets in which participants agree today to buy or sell…
31 terms
Business Finance - Chapter 2
economics
scarcity
choice
natural resources
the science of decision making about the allocation of scare…
people have wants and needs that are greater than can be sati…
deciding which wants and needs will be satisfied and which wi…
materials in the world around us
economics
the science of decision making about the allocation of scare…
scarcity
people have wants and needs that are greater than can be sati…
22 terms
Personal Finance Chapter 2
fiat money
money supply
budget deficit
budget surplus
money deemed by the government to be legal tender
the total amount of money in circulation
a financial situation that occurs when more money is spent th…
a financial situation that occurs when more money is received…
fiat money
money deemed by the government to be legal tender
money supply
the total amount of money in circulation
25 terms
finance chapter 2
the balance sheet
the income statement
cash flows
statement of retained earnings
represents a picture taken on a specific date that shows a fi…
presents the result of business operations during a specific…
designs to show how the firm's operations have affected its c…
changes in the common equity accounts between balance sheet d…
the balance sheet
represents a picture taken on a specific date that shows a fi…
the income statement
presents the result of business operations during a specific…
49 terms
finance chapter 2
debt, equity, and derivative
financial instruments
direct acquisition/ownership
indirect acquisition/ownership
3 categories of securities
classified and acquired by either direct or indirect methods
investors actually own the financial instruments (direct owne…
investors own an equity (a shares of a fund) that, in turn, o…
debt, equity, and derivative
3 categories of securities
financial instruments
classified and acquired by either direct or indirect methods
Finance Chapter 2
capital markets
angel investor
venture capitalist
public offering
all institutions and procedures that facilitate transactions…
a wealthy private investor who provides capital for a busines…
an investment firm (or individual investor) that provides mon…
a security offering where all investors have the opportunity…
capital markets
all institutions and procedures that facilitate transactions…
angel investor
a wealthy private investor who provides capital for a busines…
37 terms
Chapter 2 Finance
judicial review
Marbury vs. Madison
jurisdiction
in personam jurisdiction
the process by which courts decide on the constitutionally of…
1803: When judicial review was established
the authority of a court to hear and decide a specific action
court jurisdiction over the "person" involved in a legal acti…
judicial review
the process by which courts decide on the constitutionally of…
Marbury vs. Madison
1803: When judicial review was established
Finance: Chapter 2
State of Financial Position
Non-cash items
Cash flow from assets
Operating cash flow
Financial statement showing a firm's accounting value on a pa…
Expenses charged against revenues that do not directly affect…
The total of cash flow to bondholders and cash flow to shareh…
Cash generated from a firm's normal business activities.
State of Financial Position
Financial statement showing a firm's accounting value on a pa…
Non-cash items
Expenses charged against revenues that do not directly affect…
47 terms
Finance Chapter 2
The Annual Report and Form 10-K
EDGAR
Balance Sheet
Assets
All publicly traded companies must submit these forms. Form 1…
All forms filed with the SEC are publicly available at this d…
Financial statement showing a firm's accounting value on a pa…
What a firm owns. Classified as either current or fixed. The…
The Annual Report and Form 10-K
All publicly traded companies must submit these forms. Form 1…
EDGAR
All forms filed with the SEC are publicly available at this d…
30 terms
Finance Chapter 2
direct transfer
indirect transfer through investment b…
indirect transfer through financial in…
physical asset markets
occurs when a business sells its stocks or bonds directly to…
when transfers go through an investment bank, who facilitates…
when transfers go through a bank, insurance company or mutual…
"tangible" or "real" asset markets that are for products like…
direct transfer
occurs when a business sells its stocks or bonds directly to…
indirect transfer through investment b…
when transfers go through an investment bank, who facilitates…
finance chapter 2
economics
scarcity
choice
resources
the science of decision making about the allocation of scare…
people have wants and needs that are greater than can be sati…
deciding which wants and needs will be satisfied and which wi…
means available to develop solutions for their needs
economics
the science of decision making about the allocation of scare…
scarcity
people have wants and needs that are greater than can be sati…
18 terms
Chapter 2 Finance Terms
Job
Career
Standard of living
Trends
work to get some money
work in a field for the foreseeable future
the things you want for your daily living
developments that mark changes in a particular area, indicate…
Job
work to get some money
Career
work in a field for the foreseeable future
Finance Chapter 2
How is the value of any business asset…
financial statement
annual reports
balance sheet
Value is determined by the expected usable, after-tax cash fl…
bankers and other investors need accounting info to make inte…
a report issued annually by a corporation to its stockholders…
a statement of the firm's financial position at a specific po…
How is the value of any business asset…
Value is determined by the expected usable, after-tax cash fl…
financial statement
bankers and other investors need accounting info to make inte…
Finance Chapter 2
Federal Reserve
Financial Market
Financial Assets
Real Assets
control the money supply by setting interest rates thereby af…
a wholesale market for the creation and sale of financial sec…
stocks and bonds
physical assets
Federal Reserve
control the money supply by setting interest rates thereby af…
Financial Market
a wholesale market for the creation and sale of financial sec…
7 terms
Foundations in Personal Finance Chapter 2
Compound Interest
Emergency fund
Interest rate
Five Foundations
Interest paid on interest previously earned; credited daily,…
Five hundred dollars in readily available cash to be used onl…
Percentage paid to a lender for the use of borrowed money (in…
The five steps to financial success
Compound Interest
Interest paid on interest previously earned; credited daily,…
Emergency fund
Five hundred dollars in readily available cash to be used onl…
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