Other
D076 FINANCE SKILLS FOR MANAGERS
- Course
- Institution
D076 FINANCE SKILLS FOR MANAGERS
[Show more]
Content preview
D076 FINANCESKILLS FOR
MANAGERS
Accounting - answer- The system of recording, reporting, and summarizing past
financial information and transactions.
Accounts Receivable Turnover (AR Turnover) - answer- An activity ratio found by credit
sales divided by accounts receivable.
Activity Ratios - answer- 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) - answer- 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 - answer- A bond covenant that describes things the company
pledges itself to do in order to protect bondholders.
Agency Costs - answer- Costs that are incurred when management does not act in the
best interest of shareholders.
Agency Problem - answer- When the agent (the management) does not act in the best
interest of the principal (the owners).
Aggressive Assets - answer- Companies or securities with beta greater than 1.
, Annual Percentage Rate - answer- The annual interest rate that is charged for
borrowing money or that is earned through investment.
Fixed Expenditures - answer- An expense that you do not have direct control over and
that remains constant from period to period.
Fixed-income Securities - answer- Another name for bonds; a financial security in which
the borrower pays a fixed interest payment to investors each year.
Future Value - answer- The worth of cash flows in terms of the dollar amount in the
relative future.
Gordon Growth Model - answer- A formula used to value common stock based on the
assumptions that dividends are paid every year and grow at constant rate forever.
Gross Margin - answer- A profitability ratio found by gross profit divided by sales.
Harvest - answer- Generating cash or stock from the sales or IPO of companies in the
portfolio of investments.
Holding Period Return - answer- The return over the entire period that an investor owns
a financial security.
Hurdle Rate - answer- The required rate of return that a company expects to earn in
order to consider a project.
Hybrid Security - answer- A security that has some elements that resemble equity and
others that resemble debt.
Idiosyncratic Risk Risk - answer- Risk that results from factors at a particular firm and
can be reduced through diversification; also called firm-specific risk or nonsystematic
risk.
Incremental Cash Flows - answer- Cash flows that result from accepting a project.
Inflation - answer- The rate at which the average price level of a basket of chosen
goods and services in an economy increases over a period of time.
Initial Public Offering (IPO) - answer- When a privately held company first offers shares
of stock to outside investors to raise capital, therefore becoming a publicly owned
company.
Insurance Companies - answer- Charge premiums to invest in bonds and stocks to pay
claims.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Greaterheights. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77858 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now