Business Finance - Chapter 3

Business Finance - Chapter 3 - o Book values are based on...

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Chapter 3: Business Finance I 3.1: The Balance Sheet Balance Sheet- Financial statement that shows the firm’s assets and liabilities at a particular time. o Presents a “snap shot” of a firms assets and liabilities. o Assets are listed on the right hand side. o Liabilities are listed on the left hand side. Shareholders’ Equity- Total Assets – Total Liabilities Generally Accepted Accounting Principles (GAAP)- Procedures for preparing financial statements. Book Value- Net worth of the firm according to the balance sheet. o The investment term for Shareholders Equity Market values of assets and liabilities do not generally equal their book values.
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Unformatted text preview: o Book values are based on original values . o Market values are measured on current values of assets and liabilities. 3.2: The Income Statement • Income Statement- Financial statement that shows the revenues, expenses, and net income of a firm over a period of time. 3.3: The statement of Cash Flows • Statement of Cash Flows- Financial statement that shows the firm’s cash receipts and cash payments over a period of time. 3.5: Taxes • The corporate tax rate is 35%. • Marginal Tax rate- Additional taxes owed per dollar of additional income. • Average Tax rate-Total taxes owed divided by total income....
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This note was uploaded on 10/22/2008 for the course ECON 351 taught by Professor Westbrook during the Fall '08 term at Rutgers.

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Business Finance - Chapter 3 - o Book values are based on...

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