Financial Planning Exam 1  Created by haleyluter   38 terms
income statement  device to measure the profitability of a firm
over a defined period of time  net income  the number at the
bottom of the income statement  statement of retained earnings
transitions from the income statement to the balance sheet
price-earnings (P/E) ratio  multiplier applied to earnings per
share to determine current value of common stock  price-earnings
(P/E) ratio  allows comparison of the relative market value of
many companies  balance sheet  indicates what the firm owns and
how these assets are financed in the form of liabilities or
ownership interest (a picture of the firm at a point in time)
how fast we can turn an asset into cash  current assets  items
that can be converted to cash within one year   most liquid
asset  marketable securities  temporary investments of excess
cash, 2nd most liquid asset  accounts receivable  allowance for
bad debts to determine their anticipated collection value, 3rd
most liquid asset   inc