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a. balance sheet b. notes payable c. marketable securities d. earnings per share e historical cost accounting f. income statement g. liquidity h. cash flow from financing i. depreciation j. marginal corporate tax rate k.net worth or book value 1. P/E ratio m. stockholders' equity n. statement of cash flows o. cash flows from operations p. cash flows from investing q. free cash flow 2. 5. 6. 7. All the assets of the firm minus the liabilities and preferred stock. A financial statement that indicates what the firm owns, and how these assets are financed in the form of liabilities or ownership interest. Changes accrual-based information from income statement and balance sheet to cash based information. _The relative convertibility of short-term assets into cash. The levy expressed as a percentage that applies to each new dollar of taxable income. The multiplier applied to income per share to determine current value. The income available to common stockholders divided by the number of common shares outstanding A financial statement that measures the profitability of the firm over a period of time. Temporary investments of excess cash. Represents the net cash flow that results from changes in the amount of a firm's long- term assets 8. 9. 10.
11. 12. 13. 14. 15. The total ownership position of preferred and common stockholders. Traditional method of accounting using original costs minus depreciation. Represents the net cash flow that results from a firm's production and sales activities. Short-term signed obligations to banks or other creditors. Cash flow that is generated (or reduced) from the sale or repurchase of securities or the payment of cash dividends The allocation of the initial cost of an asset over its useful life. Cash flows from operations minus working capital minus dividend payments. 16. 17.
Answer 1) K. Net Worth or Book Value
Net Worth can be calculated as the total assets of the firm (Current + Non Current) minus the liabilites and preferred stock.
Answer 2) a. Balance Sheet
Balance Sheet indicates the ownership of assets and gives details on liabilities and equity
Answer 3) n. Statement of Cash Flows
Statement of Cash Flows changes accrual based information from income statement and balance sheet to cash based information.
Answer 4) g. Liquidity
Liquidity is the process of converting short term assets into cash.
Answer 5) j. Marginal Corporate Tax Rate
Marginal Corporate Tax rate is the tax rate levied on additional dollars of taxable income.
Answer 6) L. P/E Ratio
Price/Earnings ratio is the price of stock expressed upon the earnings of the firm. If we multiply the P/E ratio with the income per share, we get Price or current market value of firm.
Answer 7) D. Earnings Per Share
Earnings Per Share is calculated as the total income available to shareholders divided by the number of shares outstanding.
Answer 8) F. Income Statement
The income statement measure the profitibility of a firm over a period of time.
Answer 9) c. Marketable securities
Marketable securities are the temporary investments of excess cash. Recorded as part of current assets.
Answer 10) P. Cash flow from Investing
Cash flow from investing represents the net cash flow that results from change in amount of firm's long term assets.
Answer 11) M. Stockholder's Equity
Stockholder's Equity represents the ownership of common and preferred stockholders in the firm.
Answer 12) e. Historical Cost Accounting
Historical cost accounting is the traditional method of accounting using the original costs (historical costs) minus the depreciation.
Answer 13) Cash Flow from Operations
Net Cash flow which results from sale and production activities is know as cash flow from operations.
Answer 14) b. Notes Payabale
Notes Payable are the short term signed obligations to banks and other creditors. These are recorded in Current Liabilities.
Answer 15) h. Cash Flow From Financing
Cash that is generated from sale or repurchase of securities or payment of cash dividends is known as cash flow from financing.
Answer 16) i. Depreciation
Depreciation is the allocation of initial cost of an asset over its useful life.
Answer 17) q. Free Cash Flows
Free cash flows are the cash flows from operations minus Working capital minus dividend payments.
