(19) Mastering Financial Management

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  1. Financial Management
    All the activities concerned with obtaining money and using it effectively
  2. Short-Term Financing
    Money that will be used for one year or less
  3. Cash Flow
    the movement of money into and out of an organization
  4. Long-Term Financing
    Money that will be used for longer than one year
  5. Risk-Return Ratio
    A ratio based on the principle that a high-risk decision should generate higher financial returns for a business and more conservative decisions often generate lower returns
  6. Financial Plan
    A plan for obtaining and using the money needed to implement an organization's goals and objectives
  7. Budget
    A financial statement that projects income, expenditures, or both over a specified future period
  8. Cash Budget
    A financial statement that estimates cash receipts and cash expenditures over a specified period
  9. Debt Capital
    Borrowed money obtained through loans of various types
  10. Unsecured Financing
    Financing that is not backed by collateral
  11. Trade Credit
    A type of short-term financing extended by a seller who does not require immediate payment after delivery of merchandise
  12. Promissory Note
    A written pledge by a borrower to pay a certain sum of money to a creditor at a specified future date
  13. Prime Interest Rate
    The lowest rate charged by a bank for a short-term loan
  14. Factor
    A firm that specializes in buying other firms' accounts receivable
  15. Initial Public Offering (IPO)
    Occurs when a corporation sells common stocks to the general public for the first time
  16. Primary market
    A market in which an investor purchases financial securities (via investment bank) directly from the issuer of those securities
  17. Secondary Market
    A market for existing financial securities that are traded between investors
  18. Common Stock
    Stock whose owners may vote on corporate matters but whose claims on profits and assets are subordinate to the claims of others
  19. Preferred Stock
    Stock whose owners usually do not have voting rights but whose claims on dividends and assets are paid before those of common-stock owners
  20. Retained Earning
    The portion of a corporation's profits not distributed to stockholders
  21. Financial Leverage
    The use of borrowed funds to increase the return on owners' equity
  22. Corporate Bond
    A corporation's written pledge that it will repay a specified amount of money with interest
  23. Maturity Date
    The date on which a corporation is to repay borrowed money
  24. Bond Indenture
    A legal document that details all the conditions relating to a bond issue
  25. Sinking Fund
    A sum of money to which deposits are made each year for the purpose of redeeming a bond issue
  26. Trustee
    individual or firm that acts as a bond owner's representative
Card Set
(19) Mastering Financial Management
chp 19
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