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D076 Finance Skills for Managers WGU 2024/2025 already graded A+
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D076 Finance Skills for Managers WGU 2024/2025 already graded A+
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D076 Finance Skills for Managers WGUReal Return - ANSRate of growth in purchasing power of goods and services
Holding Period Return - ANSReturn over the entire period that an investor owns a financial
security
Beta - ANSA measure of the volatility, or systematic risk, of a security or a portfolio in
comparison to the market as a whole.
standard deviation - ANSUsed to measure the total risk of securities
annuity due - ANSan annuity whose payments occur at the beginning of each period,
consecutively
Par Bond - ANSWhen the bond's coupon rate equals the market yield;
Bonds are typically issued near par value
Pi - ANSProfitability index. At 1, the PI means a internal return rate equal to the cost of capital
Irr - ANSInternal rate of return (IRR) is a discount rate at which the net present value (NPV) of
an investment is equal to zero.
If the IRR is higher than the cost of borrowing to fund the investment, the investment should be
profitable. Always shown as percentage.
Net Present Value (NPV) - ANSA method of ranking investment proposals using the NPV, which
is equal to the present value of the project's free cash flows discounted at the cost of capital.
Shown as dollar amount.. At $0 it means it will neither add nor subtract value.
Inventory Turnover - ANSAn activity ratio found by COGS divided by inventory
dividends in arrears - ANSFeature of preferred stock specifying that if a company ignores
preferred stock dividends it cannot pay anything to it's common stockholders
Agency Problem - ANSthe possibility of conflict of interest between the owners and
management of a firm
Resolved by aligning interests, example giving shares to manangement
Operating Margin - ANSA profitability ratio found by EBIT profit divided by sales
Capital Structure - ANSthe mixture of debt and equity maintained by a firm
, Defensive Assets - ANSCompanies or securities with betas less than 1.
Variable Expenditure - ANSan expense that you have direct control over and that can change
from period to period
Price Risk - ANSPotential for the decline in the price of a financial security or an asset relative to
the market
efficient market - ANSa market in which prices fully reflect all the available information about a
specific security
trend analysis - ANSComparing a firms ratio across time
Coupon Yield - ANSThe stated interest rate of a bond; also known as coupon rate
syndicate - ANSa group of intermediaries that is used to oversee the issuance of stocks and/or
bonds
premium bond - ANSA bond whose price is above it's par value
Upside value - ANSThe unlimited earnings potential of equity ownership
Treasury Notes - ANSA note issued by the US government as a financial security with a fixed
interest rate and a short maturity between 1 and 10 years; abbreviated T-note.
discount bond - ANSA bond whose price is below it's par value
Fixed Asset Turnover FAT - ANSAn activity ratio found by sales divided by fixed assets
Fixed means property, plant and equipment.
Operating income Return on Investment (OIROI) - ANSOperating income (EBIT) over total
assets.
Before any finance or taxes.
Activity Ratios - ANSA category of ratios that measure how well a company uses its assets to
generate sales or cash, showing the firms operational efficiency and profitability.
Example: AR ( accts receivable) turnover: credit sales over accounts receivable.
If number is 12 that means we collect once per month.
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