Card Set Information
Chaper 12 Finantial Management
Definitions of key words chaper 12
All income that a business receives over a period of time
The costs of operating a business
detailed plans for the financial needs of individuals, families, and businesses
plans income and expanses from the beginning of a new business or a major business
financial plan for ongoing operations of the business for a specific period.
is an estimate of the actual money received and paid out for a specific period.
are used to record and analyze the financial performance of a business.
are what a company owns
are what a company owes
is the value of the owner's investment in the business
is often prepared every 6 months has date and all assets, liabilities, and equities listed.
report the revenue, expenses and net income or loss from operations for a specific period.
financial record of employee compensation, deductions, and net pay.
documentation used to process earnings payments and record each employee's pay history.
employer transfers net pay electronically into the employee's bank account
Financial performance ratios
are comparisons of a company's financial elements that indicate how well the business is performing.
are differences between actual and budget performance.
current assets compared to the current liabilites.
debt to equity ratio
company's liabilities divided by the own's equity is the debt to equity ratio.
Return on equity ratio
net profit of the business compared to the amount of own's equity
Net income ratio
total sales compared to the net income for a period such as 6 months or a year.
federal government.most states,and some local government
Social security and medicare
payments are often referred to as Federal Insurance Contrutions Act.
employers pay federal unemployment tax to the unemployment insurance system.
4 Financial steps
prepare a list for each income and expense
gather accurate info
explain the budgets