Chapter 12 financial mangment

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Chapter 12 financial mangment
2013-10-01 10:52:30
accounting financial managment

Financial Managment
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  1. Revenue:
    All income that business receives over a period of time.
  2. Expenses:
    Are the costs of operating business.
  3. Profit:
    If a business makes more than it looses
  4. Loss:
    If a Business spends more than it makes.
  5. Basic financial equations:
    • Revenue-expenses=Profit or loss
    • Revenue>Expenses=Profit
    • Revenue<Expenses=Loss
  6. Budget:
    Provides detailed plans for the financial needs of individuals, business, or families
  7. Start-up Budget
    Plans income and expenses for the beginning of a new business
  8. Operating Budget
    Describes the financial plan for ongoing operations of the business of specific needs
  9. Cash Budget
    Is an estimate of the actual money recived and paid out for a specific period.
  10. Financial records
    Are used to record and analyze the financial performance of a business.
  11. Assets
    What a company owns
  12. Liabilities
    Are what a company owns
  13. Owners equity
    is the value of a owners investment in the business
  14. Balance sheet
    Asset, liabilities, and equity of a owner at a certain date
  15. Income statement
    Revenue, income, and net income or loss of a business at a certain date
  16. Payroll
    Is the finiancial record of an employee compensation, deductions and net pay
  17. Payroll system
    Maintains personal records for each individual employee
  18. Payroll records
    is the documentation used to process earnings payments and records for each employee
  19. Direct deposit
    When an employee has their income electronically put into thier bank account
  20. Financial performance ratio
    comparisons of a companies financial elements
  21. Descrpanies
    are differences between actual and budgeted performance
  22. Net income ratio
    Shows how much income is being produced by each dollar sold.
  23. Current ratio
    Current assests compared to the current liablities
  24. Debt to equity ratio
    The companys liablites divided by the owners equaty
  25. Return on equity ratio
    The net profit of the business compared to the amount of owners equity.