Walk the balance sheet terminology

Current assets

can be turned to cash in < 1 year

long term assets

have a value/use of > 1 year or turn to cash in > 1 year

cash and cash equivalents

can be turned to cash in < 3 months

short term investments

take 3-12 months to turn to cash (marketable securities)

long term investments

take > 12 months to turn to cash

goodwill

the amount a company “overpays” when buying another company

PP & E, net

expected to last > 1 year

indicates that the value = cost of PP & E  -  A/D

intangible assets

assets are not tangible stuff, but still represent value to a company

deferred income taxes / deferred tax assets

represents future tax savings for the company

current liabilities

payable/due in 1 year

A/P or accrued liabilities

long term debt

amount of long-term debt that is due within the next year

stored value card liability

unused gift cards (unused revenue)

deferred tax liability

an amount the company will owe in the future for taxes

working capital

formula: current assets - current liabilities

the amount of cash left over if a company had to pay all of its current liabilities today

common stock

authorized: # of shares the company is allowed to sell

issued: # of shares sold

retained earnings

owner’s claim to asset accounts due to the operation of the business