Term
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Definition
| The phenomenon of prices increasing with the passage of time. |
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Term
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Definition
| A leveling off or slowdown of price increases. |
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Term
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Definition
| A form of organization that represents single-person ownership and offers the advantages of simplicity of decision making and low organizational and operating costs. |
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Term
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Definition
| A form of ownership in which two or more partners are involved. Like the sole proprietorship, [this] arrangement carries unlimited liability for the owners. However, there is only single taxation for the partners, an advantage over the corporate form of ownership. |
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Term
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Definition
| A form of ownership in which a separate legal entity is created. [It] may sue or be sued, engage in contracts, and acquire property. It has a continual life and is not dependent on any one stockholder for maintaining its legal existence. [It] is owned by stockholders who enjoy the privilege of limited liability. There is, however, the potential for double taxation in the corporate level in the form of profits, and again at the stockholder level in the form of dividends. |
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Term
| ARTICLES OF INCORPORATION |
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Definition
| A document that establishes a corporation and specifies the rights and limitations of the business entity. |
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Term
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Definition
| Large investors such as pension funds or mutual funds. |
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Term
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Definition
| This occurs when someone has information that is not available to the public and then uses this information to profit from trading in a company's common stock. |
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Term
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Definition
| A special form of partnership to limit liability for most of the partners. Under this arrangement, one or more partners are designated as general partners and have unlimited liability for the debts of the firm, while the other partners are designated as limited partners and are only liable for their initial contribution. |
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Term
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Definition
| Markets in which national, state, and local governments raise money for highways, education, welfare, and other public activities. |
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Term
| CORPORATE FINANCIAL MARKETS |
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Definition
| Markets in which corporations, in contrast to governmental units, raise funds. |
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Term
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Definition
| Competitive markets for securities with maturities of one year or less. The best examples of [these] market instruments would be Treasury bills, commercial paper, and negotiable certificates of deposit. |
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Term
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Definition
| Competitive markets for equity securities or debt securities with maturities of more than one year. The best examples of [these] market securities are common stock, bonds, and preferred stock. |
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Term
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Definition
| The market for the raising of new funds as opposed to the trading of securities already in existence. |
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Term
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Definition
| The market for securities that have already been issued. It is a market in which investors trade back and forth with each other. |
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Term
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Definition
| Process that can take many forms in a corporation, such as changes in the capital structure (liability and equity on the balance sheet). It can also result in the selling of low-profit-margin divisions with proceeds reinvested in better investement opportunities. Sometimes [it] results in the removal of the current management team or large reductions in the workforce. [It] has also included mergers and acquisitions. |
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Term
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Definition
| A financial statement that measures the profitability of the firm over a time period. All expenses are subtracted from sales to arrive at net income. |
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Term
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Definition
| The earnings available to common stockholders divided by the number of common stock shares oustanding. |
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Term
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Definition
| The multiplier applied to earnings per share to determine current value. [This] ratio is influenced by the earnings and sales growth of the firm, the risk or volatility of its performance, the debt-equity structure, and other factors. |
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Term
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Definition
| A financial statement that indicates what assets the firm owns and how those assets are financed in the form of liabilities or ownership interest. |
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Term
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Definition
| Stockholders' equity minus preferred stock ownership. Basically, [this] is the common stockholders' interest as represented by common stock par value, capital pain in excess of par, and retained earnings. If you take all the assets of the firm and subtract its liabilities and preferred stock, you arrive at [this]. |
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Term
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Definition
| Formally established by the Financial Accounting Standards Board in 1987, the purpose of [this] is to emphasize the critical nature of cash flow to the operations of the firm. The statement translates accrual-based net income into actual cash dollars. |
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Term
| CASH FLOWS FROM OPERATING ACTIVITIES |
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Definition
| Cash flow information that is determined by adjusting net income for such items as depreciation expense, changes in current assets and liabilities, and other items. It is the first section presented in the statement of cash flows. |
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Term
| CASH FLOWS FROM INVESTING ACTIVITIES |
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Definition
| Cash flow that is generated (or reduced) from the sale or purchase of long-term securities or plant and equipment. It is the second section presented in the statement of cash flows. |
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Term
| CASH FLOWS FROM FINANCING ACTIVITIES |
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Definition
| Cash flow that is generated (or reduced) from the sale or repurchase of securities or the payment of cash dividends. It is the third section presented in the statement of cash flows. |
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Term
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Definition
| The allocation of the initial cost of an asset over its useful life. The annual expense of plant and equipment is matched against the revenues that are being produced. |
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Term
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Definition
| Cash flow from operating activities, minus expenditures required to maintain the productive capacity of the firm, minus dividend payouts. |
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Term
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Definition
| The relative convertability of short-term assets to cash. Thus, marketable securities are highly liquid assets, while inventory may not be. |
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