Created by
Students also viewed
Econ
10 terms
PMP Formulas
12 terms
ACC Chapter 1
64 terms
Finance Concepts
29 terms
Exam 1
32 terms
2257 - CHAPTER 4
20 terms
5.3 Saving & Investing
21 terms
ACCT 202 Weber
55 terms
Terms in this set (21)
4 basic statements in an annual report
balance sheet, income statement, statement of stockholder's equity, statement of cashflow
balance sheet
shows assets and liabilities and equity or claims against assets. "snapshot of the firm's financial position at a particular time"
Income statement
reports the results of operations over a period of time and it shows earnings per share as its "bottom line"
Statement of stockholders equity
shows the change in stockholders equity, including the change in retained earnings between balance sheet dates.
statement of cash flows
reports the effect of operating ,investing, and financing activities on cash flows over an accounting period
Net cash flow
differs from accounting profit because some of the revenues and expenses reflected in accounting profits may not have been received or paid out in cash during the year. Depreciation is typically the largest noncash item so net cash flow is often expressed as net income plus depretiation.
operating current assets
current assets that are used to support operations, such as cash, inventory and acct recievable. No short-term investments
Operating current liabilities
current liabilities that occur as a natural consequence of operations, such as accounts payable and accruals. No notes payable or any other short-term debt
NOWC
Net operating working capital
- difference between operating current assets and liabilities. Thus, it is the working capital acquired with investor-supplied funds
- difference between operating current assets and liabilities. Thus, it is the working capital acquired with investor-supplied funds
operating long-term assets
are the long-term assets used to support operations, such as net plant and equipment. They do not include any long-term investments that pay interest or dividends
NOPAT
Net Operating Profit After Taxes.
- is the after-tax profit a company would have if it had no debt and no investments in nonoperating assets. Because NOPAT excludes the effects of financial decisions, it is better measure of operating performance that is net income
- is the after-tax profit a company would have if it had no debt and no investments in nonoperating assets. Because NOPAT excludes the effects of financial decisions, it is better measure of operating performance that is net income
ROIC
Return on invested capitol
- =NOPAT / total operating capital
- measures the rate of return that the operations are generating.
- best measure of operating performance.
- =NOPAT / total operating capital
- measures the rate of return that the operations are generating.
- best measure of operating performance.
FCF
the cash flow available for distribution to all of a company's investors after the company has mafe all investments necessary to sustain ongoing operations
MVA
Market Value Added; The difference between the market value of the firm's stock and the amount of equity capital that was supplied by shareholders.
EVA
economic value added
- the difference between after-tax operating profit and the total dollar cost of capital, including the cost of equity capital.
- Estimate of the value created by management during the year
-diff from acct profit b/c no charge for the use of equity ccapital is reflected in acct profit
- the difference between after-tax operating profit and the total dollar cost of capital, including the cost of equity capital.
- Estimate of the value created by management during the year
-diff from acct profit b/c no charge for the use of equity ccapital is reflected in acct profit