Ch 16 - Mastering Financial Management Test Yourself

financial management

Determining a firm's financial needs is one of its important functions

equity capital

Funding that comes from the sale of stock

collateral

It is pledged as security for a loan

cash flow

It is the movement of money into and out of a business organization

preferred stock

Must receive dividends before common stockholders

trade credit

Payments are usually made in 30 to 60 days from the invoice date

sinking fund

The deposits are used for redeeming a bond issue

debenture bond

This investment is backed by the reputation of the issuing corporation

line of credit

A loan that is approved before the money is actually needed

promissory note

A method of financing that is legally binding and enforceable and often issued to suppliers