Financial Management Flashcard resources for learning about Finance

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Financial ManagementFlashcard resources for
learning about Finance!
Note the information in these slides was
compiled from the New Horizons student workbook.
These slides are intended to be used only in
conjunction with the class or those who posses
both books. These slide should not be copied
elsewhere or sold.
Definitions
Formulas
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Debit
The left side of any T account that increases
assets and decreases liabilities and owners equity

• Credit
• Debit
• Footing
• Transaction

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Preferred Stock
A form of capital stock that has certain
preferences. Dividends are paid out on this
first.

• Preferred Stock
• Common Stock
• Junk Bonds
• Owners Equity

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Depreciation
The process of allocating the cost of a tangible
asset over its useful life

• Long-term liabilities
• Activity Ratios
• Fiscal Period
• Depreciation

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Dividend
An Allocation of a companys net income used for
payment to the owners

• Operating Profit
• Dividends
• Owners Equity
• Working Capital

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Capital Stock
Consists of investments that the owners of a
business have made

• Owners Equity
• Capital Stock
• Asset
• Current Assets

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Variable Cost
Costs that change in relation to the level of
activity within a companysometime associated
with number of units produced

• Profitability Ratios
• Cost of Goods Sold
• Variable Costs
• Liquid costs

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Income Statement
A financial report that provides information
regarding the profit or loss for the last
accounting period

• Balance Sheet
• General Ledger
• Income Statement
• Pro Forma financial statement

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General Ledger
A book that contains all the accounts of the
business listed in numerical order low to high

• General Ledger
• Balance Sheet
• General Journal
• Horizontal Analysis

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General Journal
A book of chronological business transactions
including a brief description of its purpose and
account number. Transactions are first recorded
here

• General Ledger
• Balance Sheet
• General Journal
• Horizontal Analysis

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Cash Flow Statement
Provides information about a companys inflow and
outflow of money

• Income Statement
• Cash Flow Statement
• Pro Forma Statement
• Income Statement

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Pro Forma Statement
A forward looking document created when setting a
budget used for establish the projected
financial activity for an upcoming accounting
period

• Income Statement
• Cash Flow Statement
• Pro Forma Statement
• Income Statement

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Current Liabilities
Debts and obligations that a company expects to
pay within 12 months

• Expense
• Depletion
• Current Liabilities
• Break even point

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Common Stock
The most common form of ownership in a business
in which dividends are paid to common
stockholders after all payments have been made on
debts and to preferred stockholders

• Preferred Stock
• Common Stock
• Junk Bonds
• Owners Equity

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Liability
The amount of money a business owes a person or
company for goods or services rendered

• IOU
• Operating Expenses
• Debit
• Liability

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Retained Earnings
Represents all earnings that a business has
accumulated since its inception less any
dividends it has paid

• Retained Earnings
• Withdrawal Account
• Party fund
• Capital Stock

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Asset
Everything of value owned and used in a business
such as cash, sales, supplies

• COGS
• Capital Stock
• Asset
• Liquidity

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Owners Equity
Part of a business that belongs to the owner

• Owners Equity
• Capital Stock
• Asset
• Current Assets

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Credit
The right side of any account that decreases
assets and increases liabilities and owners
equity

• Credit
• Debit
• Footing
• Transaction

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Financial Formulas to know

• Marks little Finance portal

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Working Capital
Current Assets Current Liabilities

• Operating Profit
• Dividends
• Owners Equity
• Working Capital

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Operating Income
Gross Profit - Sales

• Operating income
• Dividends
• Gross profit on sales
• Owners Equity

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Gross Profit on Sales
Total Revenue - COGS

• Operating income
• Dividends
• Gross profit on sales
• Owners Equity

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Current Ratio
Current Assets/Current Liabilities

• Current Ratio
• Leverage Ratio
• Accounting Equation
• Profit Margin

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Debt to Assets Ratio
Total Liabilities/Total Assets

• EBIT
• Liquidity Ratio
• Debt to Assets Ratio
• Retained Earnings

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EBIT Earnings Before Interest and Taxes
Sales COGS Operating Expenses Dividends
Interest

• Capital Stock
• EBIT
• Long Term Liabilities
• Net Loss

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Accounting Equation
Liabilities Owners Equity

• Accounting Equation
• Current Assets
• Owners Equity
• Operating Income

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COGS Cost of Goods Sold
Beginning Inventory purchases to inventory
ending inventory

• Inventory Turnover
• EBIT
• COGS
• Current Assets

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Net Operating Margin
Operating Profit/Sales

• Inventory Turnover
• Profit Margin on Sales
• Owners Equity
• Net Operating Margin

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Profit Margin on Sales
Net Profit/Sales

• Inventory Turnover
• Profit Margin on Sales
• Owners Equity
• Net Operating Margin