Finance CH2

Financial statements, including the balance sheet, income statement, and cash flow statement

is a financial statement that reports a company's assets, claims against assets, liabilities and shareholders' equity.

is a financial statement that shows you how profitable your business was over a given reporting period. It shows your revenue, minus your expenses and losses. "bottom line"

shows the changes in the capital account due to contributions, withdrawals, and net income or net loss, retained earnings

is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses.

refers to the difference between a company's cash inflows and outflows in a given period. In the strictest sense, refers to the change in a company's cash balance as detailed on its cash flow statement. Depreciation is typically the largest non-cash item so net cash flow is often expressed as net income plus depreciation.

is a company's total earnings, calculated according to generally accepted accounting ...

are those short-term assets used to support the operations of a business. In most organizations,are cash, accounts receivable, and inventory, they do not include short term investments

that are (a) undertaken to carry out the business operations, and (b) expected to be settled in next 12 months. They exclude any current loans or interest-bearing liabilities. (they do not include notes payable)

is the excess of operating current assets over operating current liabilities. In most cases it equals cash plus accounts receivable plus inventories minus accounts payable minus accrued expenses.
Investor supplied funds

are acquired and used by a company to generate revenue over a number of years. (They do not include long-term investments that pay interest or dividends.

represents all the current and non-currents assets used by a business in its operations. It includes inventories, accounts receivables, fixed assets, etc,is an important input in calculation of free cash flow.income needed to run the business"

is earnings before interest and taxes (EBIT) adjusted for the impact of taxes, is a measure of profit that excludes the costs and tax benefits of debt financing, (it is better to measure operating performances than income

is a way to assess a company's efficiency at allocating the capital under its control to profitable investments

represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets, available for distribution to all a company's investors after all investments necessary to run the business are complete.

NOPAT minus Investments in total net operating capital

is the difference between the current market value of a firm and the capital contributed by investors. If the debt of preferred stock equal their values as reported then the MVA is the difference between market value of the firm's stock and the amount of equity its share holders have supplied

is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis. created value by management , 50% of dividends received by one corporation from another are excluded from taxable value

Interest paid by a corporation is a...subject to limits established bu 2017 Tax Cut and Jobs Act, dividends are not a deductible expense causing the tax system to favor debt over equity financing

provision allows certain losses and expenses to be carried forward indefinitely to offset future taxable income.

business that have limited liability benefits of the corporate form of an org, yet are taxed as partnerships or proprietorships.

The higher the income the higher the tax.

significant pieces of property such as homes, cars, investment properties, stocks, bonds, and even collectibles or art.

If sold for more than it cost the profit is called

If the asset is sold for a loss it is a