Chapter 1
A current liability is defined as debt that must be repaid within which period of time?
1 year
Balance sheet shows a snapshot of the firms finances________
@ a single point in time
Why would it not make sense for a firm to set financial goals like "maximize profits" or "minimize costs"?
A sole focus on items like this may lead to ignoring what is in the stockholders' long-term best interests.
Cash flow sent from the financial market to the firm in forms of stock is used to invest in:
Assets
The left side of a balance sheet shows...
Assets
Equipment, warehouses, and machinery are examples of..
Fixed assets
A good financial decision will do which of the following?
Increase market value of shareholders' equity, Increase the value of the firm's existing stock
Which of the following, according to the textbook, are possible financial goals for a company?
Maximize profits, Minimize costs, survive
What happens when a firm creates value?
Shareholder's wealth increases
Shareholders' Equity
Total assets - total debt
The controller is responsible for:
accurate financial accounting
cash, accounts receivable, and inventory
current assets
The primary responsibility of financial managers is to increase the value of _______
current shares of stock
current liability
debt that must be paid within one year (accounts payable)
A bad financial decision is defined as a decision that ______ owners' equity.
decreases
some of the cash flow generated by a firm goes back to the financial markets in the form of
dividends and debt payments
Some of the cash flow generated by a firm goes back to the financial markets in the form of ______.
dividends and debt payments.
What determines when a sale is recorded for accounting purposes?
generally accepted accounting principles
Fixed Assets
last a long time, tangible and intangible
A ______ liability does not have to be paid within 1 year
long term
Corporate bonds are generally classified as:
long term debt
Assuming interest rates are positive, one dollar received today is worth ______ one dollar received next year.
more than
As the amount and timing of cash flows are not known with certainty, this means that investors carry a certain amount of _____, which firms should be aware of.
risk
Most investors have an aversion to :
risk
The primary responsibility of financial managers is to increase the value of______
the current shares of stock
The goal of financial management is to maximize the current value (per share) of the existing stock.
true