Assets that depreciate over more than ve years eg

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Unformatted text preview: t of the manufacturing and assembly. The row heading refers to fulfillment costs as well, for service companies. Liabilities Debts; money that must be paid. Usually debt on terms of less than five years is called short-term liabilities, and debt for longer than five years in long-term liabilities. Long-term assets Assets like plant and equipment that are depreciated over terms of more than five years, and are likely to last that long, too. Long-term interest rate The interest rate charged on long-term debt. Long-term liabilities This is the same as long-term loans. Most companies call a debt longterm when it is on terms of five years or more. M Materials Included in the cost of sales. These are materials involved in the assembly or manufacture of goods for sale. N Net cash flow This is the projected change in cash position, an increase or decrease in cash balance. Net profit The operating income less taxes and interest. The same as earnings, or net income. Net worth This is the same as assets minus liabilities, and the same as total equity. O Other short-term assets These might be securities, business equipment, etc. Other short-term liabilities These are short-term debts that don’t cause interest expenses. For example, they might be loans from founders or accrued taxes (taxes owed, already incurred, but not yet paid). GLOSSARY G.5 P Paid-in capital Real money paid into the company as investments. This is not to be confused with par value of stock, or market value of stock. This is actual money paid into the company as equity investments by owners. Payment days The average number of days that pass between receiving an invoice and paying it. It is not a simple estimate; it is calculated with a financial formula: =(Accounts_payable_balance*360)/(Total entries to accounts payable*12) Payroll burden Payroll burden includes payroll taxes and benefits. It is calculated using a percentage assumption that is applied to payroll. For example, if payroll is $1,000 and the burden rate is 10 percent,...
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This note was uploaded on 01/26/2014 for the course BUINESS 102 taught by Professor Unknown during the Winter '09 term at University of Phoenix.

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