Miscellaneous Quiz / Financial Management Definitions

Random Miscellaneous or Definition Quiz
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DefinitionTerm
Practice of buying goods and services now and paying for them them later. A percentage discount is often offered for early payment.
Borrowed funds needed for a period of longer than one year
Borrowed funds needed for one year or less
Estimates a firm’s projected cash inflows and outflows, used to plan for any cash shortages or surpluses during a given period
Ties together all of a firm’s budgets. The projections of dollar allocations to various costs and expenses needed to operate the business given the projected revenues.
Organizations that make short-term loans to borrowers who offer tangible assets as collateral. They usually accept higher risk companies but charge higher interest rates.
Highlights a firm’s spending plans for major asset purchases that often require large sums of money
Funds raised through operations within the firm of through sale of ownership in the firm
Funds raised through various forms of borrowing that must be repaid
Predicts cash inflows and outflows in future periods based on expected costs, revenues and expenses
Sum of borrowed money backed by something valuable, such as property or assets. Failure to pay will result in lender taking control of the collateral.
Bonds not backed by collateral
Reserve account in which bond issuer periodically retires some part of the principal prior to maturity so enough capital will be accumulated by the maturity date to pay off the bon
People who make recommendations to top executives regarding strategies for improving the financial strength of a firm
Sum of borrowed money not backed by specific assets. Usually only given to established, reliable firm.
Large organizations that invest their own funds or the funds of others
Predicts revenues, costs and expenses for a period longer than one year, sometimes as long as 5-10 years into the future
A small loan from a close relation willing to finance the business. Best to avoid these.
Process where a firm compares actual revenues, costs, etc. with the projected ones
DefinitionTerm
Financial plan that sets for the management’s expectation and allocates specific use of resources throughout the firm on the basis of those expectations
Process of selling accounts receivable for cash
That the greater the risk a lender takes in making a loan, the higher the interest rate required.
Bonds backed by tangible collateral.
Corporate certificate indicating that a person has lent money to a firm. Company issuing these is legally bound to make regular interest payments to investors and repay entire prin
Given amount of unsecured borrowed sum of money a bank will lend to a business. May increase if credit rating improves and/or business grows.
Can be used to make purchases and pay back at a later date. Charge large amount of interest and should only be used as a last resort.
Promissory note that requires the borrower to repay the loan in specified instalments.
Predicts revenues, costs and expenses for a period of one year or less
Line of credit guaranteed by the bank. Usually a fee is charged for this.
Goal is to optimize the firm’s profitability and make the best use of its money
Written contract with a promise to pay a specific sum at a specific time; given to firms with no credit or a bad credit rating
Provide loans for businesses. Often reluctant to provide loans to small firms unless they seem promising and well organized. Close contact after the loan is issued is also helpful
The job of managing a firm’s resources so it can meet its goals and objectives
Exact date that the issuer of bonds must pay the principal back to the bondholder(s).
Function in a business that acquires funs for the firm and manages those funds within a firm
Provide loans of 3-7yrs on average but may be up to 20yrs. Debt from loans by these is tax deductible.
Unsecured promissory notes of $100k or more that mature in 365 days or less. Only large firms with good credit can sell them; a good investment opportunity for small firms with exc
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