Company finance - cash flow, profit and loss account, balance sheet – Vocabulary and Phrases
cash flow statement – money coming into and going out of a company in a particular period: cash inflows and outflows
From their cash flow statement SPH ended the year with only $81.3million cash.
current liabilities – financial obligations of a company. Normally within one year or less
The cash ratio indicates that cash and securities can cover the Company's current liabilities by 142%
balance sheet – a 'snapshot picture' of company's assets and liabilities at the end of a particular period, usually the 12-month period of its financial year
We are looking very hard at creative ways to finance some of our major needs and activities without having a negative impact on our balance sheet.
current/circulating/floating assets – assets which can be used or converted to cash in the short term , normally within one year or less, e.g.. Cash at the bank, securities - investments in other companies, stocks, of raw materials, unfinished goods etc.
Current assets, such as cash, accounts receivable and inventories are important in determining whether a company has enough resources to fund its operations.
tangible/fixed assets – equipment, machinery, buildings, land
Companies must focus on building long-term strategic assets such as brand equity rather than tangible assets such as buildings, factories and the like.
intangible assets – e.g.. Goodwill - the value that the company thinks it has as a functioning organization with its existing customers and in some cases brands, as they have the power to earn it money and thus would have a value for any potential buyer of the company.
Measuring the value of intangible assets such as company culture, knowledge management systems, and employees' skills is the holy grail of accounting.
liquid/available assets – anything that can be quickly turned into cash
The Company maintains a relatively high level of liquid assets such as investment securities and mortgage-backed and related securities.
net assets – fixed assets plus the difference between current assets and liabilities
Between 1996 and 2000, mutual funds earned a realised income amounting of just 15-18 per cent of their net assets.
wasting assets – those which are gradually exhausted (used up) in production and cannot be replaced
Asset Management will specifically avoid wasting assets, such as classic cars and even wine.
ledger – a book of accounts
Entries in the ledger are recorded under the names of the individuals who had business dealings with the company.
liquidity – in terms of a balance sheet, this refers to how quickly and easily a company can turn its assets into cash
Most hospitals improved their liquidity by reducing the time bills were outstanding.
working capital – the amount of surplus funds a company would have if it converted its near-term assets into cash and paid off its short-term liabilities. Working capital is current assets minus current liabilities
The Company had a working capital of $4731366, which was sufficient for. the Company to meet its planned business objectives.
accounts receivable – amounts that have been billed and are owed to the company.
Accounts Receivable includes money owed to The Evergreen State College for goods or services provided to students and/or other parties.
accounts payable – a payment on goods or services a company has already received
Accounts Payable includes maintenance of payment records and issuance of payments for all supplier invoices
insolvency/bankruptcy – a financial condition experienced by a person or business entity when their assets no longer exceed their liabilities or because of their inability to pay debts as they mature.
Air America Radio today filed for bankruptcy, listing liabilities in excess of $20 million and assets of only $4 million.
to go bust/broke/under – less polite ways of saying that a company has gone bankrupt
In October of 2002, the company went bust and stopped providing service.
total revenue – the amount of money a company makes through the sale of its goods
The total revenue of the top 100 Chinese electronics and information technology (IT) manufacturers in 2005 hit 964.3 billion Yuan (US$120.5 billion).
profit margin – the amount of revenue left once all costs have been deducted, shown as a percentage of total revenue
By moving production outside of the USA, the company has consistently widened profit margins slightly each year.
chief financial officer (CFO) – of a company or public agency is the corporate officer primarily responsible for managing the financial risks of the business or agency.
It's the CFO's job to tell the CEO what he can and cannot do when it comes to the company's money and financial statements.
chief executive officer (CEO) – the highest-ranking corporate officer, administrator, corporate administrator, executive, or executive officer, in charge of total management of a corporation, company, organization or agency.
Silistix announced the promotion of David Fitz from vice president of marketing to Chief Executive Officer (CEO) for the company.
return on equity (ROE) – company's profits for the year in relation to the value of its assets/resources to show how well those resources are managed
Only 14 of the banks consistently increased their ROE each year over that three-year time frame.
leverage – the amount of a company borrows and the interest it pays on this in relation to its share capital
The Company's leverage has increased significantly in recent years as a result of its rate increases, reserve strengthening and decreased surplus.
depreciation/amortization, to depreciate – the reduction of the value of an asset by prorating its cost over a period of years, to decline in value
In 2002 the value of the car depreciated by 25% of. the value it had at the end of 2001.
to write off – to regard as worthless, lost, obsolete, etc.; decide to forget; to amortize
The new equipment was written off in three years.
to bleed red ink – to make loss
Federal and State budgets will bleed red ink with all the Medicaid costs.
to plough back profits – re-invest profits
He ploughed back the profits of his newspapers into developing them technologically or for raising the salaries and benefits of his staff.
to put up funds – provide funds
Hong Kong government announced Monday that it will put up funds to help Cathay Pacific Airways and Dragonair.
to wind up – to force the company to stop trading
Following a decline in its subscription numbers, the publisher was forced to wind up the paper-based magazine.
pension – a steady income given to a person (usually after retirement).
Her pension is $21180 a year and, like other retirees, she hasn't seen an increase for 10 years.
currency – something that is used as a medium of exchange; money.
The Bahamas' unit of currency is the Bahamian dollar ($B) which is based on the US dollar.
fund – a supply of money or pecuniary resources, as for some purpose
Union Centre Fire Company received funds for operations and fire safety trainings.
aid – help or support; assistance.
Students may apply for financial aid, such as grants and scholarships, which does not have to be repaid.
budget – an estimate, often itemized, of expected income and expense for a given period in the future.
Spending is going up about to $518 million, or 7.2 per cent, compared to last year's budget.
to exceed the budget – to go beyond in quantity, degree, rate, etc
The Aquatic Education Program exceeded their budget by nearly 53%.
instalment – any of several parts into which a debt or other sum payable is divided for payment at successive fixed times:
We paid for furniture in monthly instalments.