D076 WGU - Glossary QUIZ ALREADY GRADED

Accounting - The system of recording, reporting, and summarizing past financial information and transactions. Accounts Receivable Turnover (AR Turnover) - An activity ratio found by credit sales divided by accounts receivable. Activity Ratios - A category of ratios that measure how well a company uses its assets to generate sales or cash, showing the firm's operational efficiency and profitability. Additional Funds Needed (AFN) - Another name for the discretionary financing needed or external financing needed. It represents the additional financing needed given a firm's expectations for future growth. Affirmative Covenants - A bond covenant that describes things the company pledges itself to do in order to protect bondholders. Agency Costs - Costs that are incurred when management does not act in the best interest of shareholders. Agency Problem - When the agent (the management) does not act in the best interest of the principal (the owners). Aggressive Assets - Companies or securities with beta greater than 1. Annual Percentage Rate - The annual interest rate that is charged for borrowing money or that is earned through investment.