logo image

Finance 2

short term debt
debt instruments with original maturities of one year or less.
income stocks
stocks of firms that traditionally pay large, relatively constant dividends each year
after tax cost of debt
the relevant cost of new debt, taking into account the tax deductibility of interest
weighted average cost of capital
a weighed average of the component costs of debt, preferred stock, and common equity
working capital
a firms investment in short term assets; cash, marketable securities, inventory, and accounts receivable.
relaxed fat cat current asset investment policy
when large amounts of cash and marketable securities and inventories are carried and under which sales are stimulated by a liberal credit policy that results in a high level of receivables
maturity matching approach
a financing policy that matches asset and liability maturities. This would be considered a moderate current asset financing policy.
credit policy
a set of decisions that includes a firms credit standards, terms, methods used to collect credit accounts, and credit monitoring procedures.
days sales outstanding
how long it takes to collect accounts receivable
aging schedule
a report showing how long accounts receivables have been outstanding.
work in process
inventory in various stages of completion. Process of raw materials to finished goods.
trade credit
the credit created when one firm buys on credit from another firm. accounts payable
blanket liens
a lien on all inventory. gives the lending institution a legal claim against the borrowers entire inventory.
sales forecast
a forecast of a firms unit and dollar sales for some future peroid
operating leverage
how much assets your using to leverage your business
lumpy assets
assets that cannot be acquired in small increments, but in large amounts
marketable securities
securities that can be sold on short notice without loss of principal or investment
fixed costs
costs that remain unchanged in total amount over a wide range of production levels
cash budget
a schedule showing cash receipts, cash disbursements, and cash balances for a firm over a specified peroid of time.
variable costs
costs that are fixed per unit and change in total amount as production volume changes
term loan
a contract negotiated directly with a bank in which the borrower agrees to make a series of interest and principal payments on specific dates to the bank
junk bonds
high-risk, high-yield bonds used to finance mergers, leveraged buyouts and failing companies
dividends and retained earnings
the net income that a firm earns can either be paid out to shareholders as dividends or can be reinvested in the company as retained earnings
how do shareholders exert control of the management of a firm?
vote annually on board of directors
identify and explain types of cash flows used in making a decision to accept or reject a project
relevant cost, after tax cost, incremental cost, direct cost, opportunity cost
what is included in the calculation of the initial investment outlay of a project?
shipping and installation costs associated with the purchase of an asset
what is the formula for net working capital
current assets- current liabilities
what are 4 reasons a business holds cash balances?
emergency for rainy days and low sales, transactions with another company, speculative cash for purchasing new assets, and compansating for bills.
describe a promissory note
a fany IOU. A promise to pay a balance owed.
describe in detail factoring and pledging of accounts receivable.
Factoring= selling accounts receivable
Pledging= using as collateral on a loan
define operating breakeven point
operating income is 0. enough to cover cost
describe 5 major points of the cash conversion cycle
order and receive materials, add labour and finish goods, sales, pay accounts payable and pay wages, and collect accounts receivable.
ways to eliminate any problems that slow the cash conversion cycle down
speed up assembly line, hold off on paying accounts payable, and decreasing price will increase sales

Need essay sample on "Finance 2"? We will write a custom essay sample specifically for you for only $ 13.90/page

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
×
Sorry, but copying text is forbidden on this website. If you need this or any other sample, please register

Already on Businessays? Login here

No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy