Roles of B​- reward investors, create jobs, develop/apply tech, pay taxes

Role of G​- moving toward a free enterprise solution(dereg banks airlines telecomm utilities)
encourages comp
Types of corp​: ​C corp​- multiple shareholders, often pub, separates manage/investors,
separate legal and financial entitiy, lim liability, build equity and retain earnings, board of
directors reps shareholders, may have dif classes of common stock, dis is double tax, advan is
that it can retain cap, has perpetual life, ​Proprietorship: ​single owner, not pub, sep entity but
blur lines, owners assets at risk, no doubTax, can retain min capital must pay out most prof,
PartnerShip:​ two or more partner owners, each individually liab, earning distr to partn,
LimitedPartnership: ​limited liab, no manage role, specific agreement about respons, profit,
SCorp: ​lim liab, prof to owner is taxed at indiv level, <75 shareholders, >95% of earnings must
be distr to owners in dividends ​Balance Sheet:​ financial position at a point in time, summarizes
assets, liabs, and owners equity, based on hist costs not curr, represents financial resour
available, book value is owners equity, market value is what it sells for ​Income statement:
financial performance during a period of time ​Who wants it:​ shareholders, employ, cust, lend,
supp, comp, gov, fasb, analyst
Balance Sheet Stuff- ​assets must eq liabs and o.e, if invest 10000 cash for opers in form of
rent = ^cash in curr assets & ^paid in o.e, if paid 1500 cash for store fixtures= d cash ^ fixtures
under fixed assets, if 8000 spent on merch half cash/cred = ^inv in current ass and down cash &
^acc pay in curr liabs, if sold inv for 2000 that orig cost 1200 = down 12 inv & ^2000 cash &
^800 o.e in retained earnings, if 3000 cred sales from 1800 of inv = ^acct rec in curr ass & down
3000 inv & ^1200 ret earn, paid 1500 to creditors = down accpay & down cash, if received 500
paid on acct by his charge custs = down acct rec & up cash, if paid 1400 for expenses like rent
= down cash and down ret earns, if sells 3000 worth of inv for only 1000= down 3000 inv & up
1000 cash & down 2000 in ret, ​Income Statement:​ reports perf over period, summary of
various sales and expenses during period, ​Glosssary of Fin term: ​net prof = profit after
expenses and taxes also NPAT PAT profit, operating income = income from operations before
corp charges, taxes, and interest aka EBIT or income from ops, gross profit = profit after
accounting for costs of goods or services aka margins or product margin, DSO (days
outstanding) average number of days outstanding in accts rec aka age of recs, SG&A = selling,
general and admin expenses aka oper expense, ITO(inventory turnover)= cost of goods sold
diveded by average inv, sometiems sales div by aver inv, gross margin = gross prof divided by
sales, ​Profitability ratios​: gross margin=(sales-cogs)/sales, return of sales= npat/sales, return
on assets= npat/assets, return on equity=npat/equity, ​Productivity:​ sales/# of empl,
NPAT/emply, Gearing ratio aka asset turnover= sales/assets, ​Leverage: ​debt to equity= funded
debt/o.e (funded debt is actual debt not credit, so long term), debt to capital, funded debt/ tot
cap, times interest earned= ebit/ interest expense, ​liquidity:​ current ratio = current assets/
current liabs, acid test= (current assets-current liabilities)/current liabs, working capital ratio=
(current assets-inv)/ sales or (a/r+inv-a/p)/sales, average age of rec(DSO)= accts rec/salesx360,
inv turn (ITO)= cogs/inventory, ​Other Ratios: ​ earnings per share= NPAT/ shares outstanding,
price earnings= stockprice/ earnings per share, market cap to book = #sharesXprice/
shareholders eq, price to sales = market cap/sales, price earnings
growth=(price/earnings/growth sales),​ Return on assets​: best to judge managers