Accounting Ch. 10-12 – Flashcards
Unlock all answers in this set
Unlock answersquestion
Common Stock
answer
The basic form of capital stock
question
Paid-in capital
answer
Capital from investments by the stockholder
question
Dividends
answer
Distributions by a corporation to its stockholders
question
Legal Capital
answer
The portion of stockholders equity maintained for the protection of creditors
question
Outstanding stock
answer
Stock in the hands of stockholders
question
Par value
answer
Arbitrary amount assigned to a share of stock at the time of incorporation
question
Preferred stock
answer
Stock that gives its owners certain advantages over common stockholders, such as the right to receive dividends before the common stockholders
question
Retained earnings
answer
Capital earned through profitable operation of the business
question
Treasury stock
answer
A corporations own stock that it reacquires
question
Stockholders equity
answer
Paid-in capital plus retained earnings
question
Stock Dividends
answer
Increase paid-in capital by the same amount that they decrease retained earnings Have no effect on liability decrease retained earnings
question
Cash Dividends
answer
Decrease both total assets and total stockholders equity decrease retained earnings
question
Check figure
answer
change in cash, which can be found on a comparative balance sheet showing beginning and ending cash balances for the period.`
question
Free cash flow
answer
Net cash flow from operations - Cash payment for investment in L/T
question
Vertical Analysis
answer
Converts all reported figures to percentage based upon a base amount for one year
question
Trend Analysis
answer
Form of horizontal analysis where we calculate the percentage change for a number of years. First year is the base year
question
Current Ratio
answer
Current assets/ Current Liabilites Measures whether the company has enough current assets to pay off all current liabilites 2 or bigger
question
Quick ratio
answer
(Current assets-Inventory-Prepaid expenses) / Current liabilites
question
Gross Profit Percentage
answer
(Net sales-COGS) / Net Sales What percentage of sales goes directly to gross profit
question
Net Income Percentage
answer
Net Income / Net sales Determines what percentage of sales goes directly to net income
question
Debt ratio
answer
Total liabilities / Total assets Higher is more difficult to pay off obligations
question
A/R Turnover
answer
Net Sales / Average A/R Higher means what you are collecting the money sooner
question
Inventory Turnover
answer
COGS / Average Inventory How many times per year the company is selling its inventory
question
Return on Assets
answer
net Income / Average total assets return on every dollar invested in assets
question
Earnings per share
answer
Net income / average number of common stock shares outstanding
question
Dividends per share
answer
Dividends / averages number of common stock shares outstanding
question
Dividends payout rate
answer
Dividends / Net income How much of net income is paid out to the owners via a dividend
question
Return on Equity
answer
Net income / Average SE How much return the company has based on the owners investment
