Economics 012- 4-1-2008

Economics 012- 4-1-2008 - o Should be no less than 2 o If...

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Economics 012 4/1/2008 - Net Worth= assets – liability o Assets= liability + net worth - Liquid Short Term Assets: assets that are cash, or should become cash within a year - Fixed Assets: buildings, equipment, etc. - Insolvent: net worth is a negative number - Secured creditors: only claim on a particular asset, which in bankruptcy they can (and will) seize - Unsecured creditors: have a claim on the company but not in any particular asset, therefore they are not guaranteed anything - Liquidity Crisis: based on short term liabilities that have to be paid within a year exceeding short term assets o May be net worth o But the long term fixed assets cannot be sold quickly o Ex: Bear Stearns - Quick Ratio: Liquid Assets relative to Liquid liabilities
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Unformatted text preview: o Should be no less than 2 o If it gets closer to 1, company is in big trouble because the company may not be able to pay their short-term payments (payroll, etc.)-Balance Sheet: a snapshot of the health of a firm in the short-term o Drawn at the end of December o Probably drawn at the end of each quarter as well-Profit Loss Statement o Moving picture of the operations of a company over a period of time, like a calendar year o Trying to capture the value of all of the goods that youve sold o Bottom line= net profits-Earnings per share: has a lot to do with what the stock is going to sell for per share...
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This note was uploaded on 10/23/2010 for the course ECON 012 taught by Professor Joutz during the Spring '08 term at GWU.

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Economics 012- 4-1-2008 - o Should be no less than 2 o If...

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