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