Exam 1 Study Guide
Exam 1 Study Guide FIN 3010-001
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This 2 page Study Guide was uploaded by Anna Notetaker on Wednesday September 23, 2015. The Study Guide belongs to FIN 3010-001 at Middle Tennessee State University taught by Gregory Nagel in Fall 2015. Since its upload, it has received 43 views. For similar materials see Business Finance in Finance at Middle Tennessee State University.
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Date Created: 09/23/15
Business Finance Fin 3010 Prof Nagel Operating Cash Flow Ebit1 Tax Rate Depreciation Expense Ebit is also known as Operating Pro t Cash increase causes a decrease in assets and an increase in liability which will increase account payables Cash decrease causes an increase in assets and a decrease in liability which will cause a decrease in account payables Dupont Formula is ROE Pro t Margin Total Assets Turnover Equity Multiplier ROE Earning Average for Common Stock net incomeBook Value of Common Stock Equity equity Pro t Margin increases ROE Present Value Cash Payment 1 to the power of Years PE Ratio Market Price per ShareEarnings per Share as well as Common Stock Current liabilitycash Future Cash Flow Operating Cash Flow 2012 GFA 2011 GFA 2012 CA 2011 CA 2012 AP 2011 AP 2012 A 2011 A gt example A Accrual AP Account Payable CA Current Assets and GFA Grossed Fixed Assets The goal is nding the best deal for the lowest price when it comes to the exchange for money from the rst day of class The Rate of Return decreases as the selling price increases Sole proprietorship is a business that is owned by a single individual It has unlimited liability and it is dif cult to transfer The owner can lose everything business and personal and the taxes are done as personal This type of business last a lifespan of the individual and it is the easiest least regulated business to create Partnership is when there are two or more individuals or entities A general partnership will split the business 5050 while a limited partnership depends solely on what the individuals put into the business The partners have unlimited liability and they share the gains and loss of the business If there is a limited partnership not all partners are actively involved in the business which leaves one having the unlimited liability A partner agreement is made to delegate the responsibility of the business Corporation is a business that is created as a distinct legal entity It is owned by one or more individual or entity There is a separation with the owner and the corporation which allows the business to have a double taxation This business is also the hardest to start and it has unlimited life Stockholders are the owners of a corporation Depreciation expense is noncash A decrease in gross xed assets causes an increase in Future Cash Flows Directors are the owners in discussion with management Maximizing pro t as the manager s goal has aws like earning gures focus on past performance rather than current of future risks are ignored and cash received are ignored An agency cost refers to any time a decision by any employee is made that does not maximize the shareholder39s wealth Total asset turnover ratio is used as a request for a one month loan Capital gain occurs when capital assets are sold for more than their original purchase price
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