Business Exam
merger
Combination of two or more companies into a single firm
financial ratio analysis
Financial managers use _____ to assess the financial strengths and weaknesses of their firm.
liabilities plus owners' equity
The fundamental accounting equation states: Assets = _________.
divestiture
a firm selling one or more businesses
business plan
a formal written document that describes the nature of a business and how it will operate
public accountant
accountant who provides accounting services to individuals or business firms for a fee
horizontal analysis
analysis of financial statements that compares account values reported on these statements over two or more years to identify changes and trends
Profitability Ratios
are ratios that measure the rate of return a firm is earning on various measures of investment.
implict costs
arises when a firm uses owner-supplied resources
The three kinds of basic financial statements that are prepared in financial accounting are:
balance sheet, income statement, and statement of cash flows.
operating budget
budget for day-to-day expenses
A _____ is a form of business ownership in which the business is considered a legal entity that is separate and distinct from its owners.
coroporation
The primary reason people choose to become entrepreneurs is to:
earn more money.
finacial budgets
focus on firms financial goals and identify the resources needed to achieve them
Liquidity ratios
measure the ability of an organization to convert assets into the cash it needs to pay off liabilities that come due in the following year.
The average collection period
measures how long it takes for a firm to receive payment from customers who buy on credit.
financial capital
money that a firm uses to acquire assets and finance its operations
acquisition
one firm buying another
Government accountants
perform a variety of accounting functions for local, state, or federal agencies, such as the Internal Revenue Service (IRS) and the Federal Deposit Insurance Corporation (FDIC).
Management accountants
provide analysis and prepare reports and financial statements for their organization.
Crowdfunding
raising money for a project or venture by obtaining many small amounts of money from many people
Masters Budget
represents an overall plan
corporate bylaws
the operating procedures for the corporation
Owner's Equity
the owner's claims to the assets of the business