Financial Management and Securities Markets

Flashcards containing key vocabulary terms and definitions related to financial management and securities markets.

Working Capital Management

The management of a company's short-term assets and liabilities.

Current Assets

Assets that are expected to be converted into cash within a year, including cash, accounts receivable, investments, and inventory.

Marketable Securities

Financial instruments that can be easily converted into cash, such as Treasury bills, commercial paper, and certificates of deposit.

Accounts Receivable

Money owed to a business by credit customers.

Inventory

Goods and materials a business holds for the purpose of resale.

Accounts Payable

Money a company owes to its suppliers or creditors.

Capital Budgeting

The process of planning and managing a company’s long-term investments.

Bond

A fixed income instrument that represents a loan made by an investor to a borrower.

Unsecured Bond

A bond that is not backed by any specific collateral.

Secured Bond

A bond that is backed by specific assets or collateral.

Prime Rate

The interest rate that commercial banks charge their most creditworthy customers.

Initial Public Offering (IPO)

The first sale of stock by a company to the public.

Dow Jones Industrial Average

A stock market index that shows the value of 30 significant publicly traded companies in the United States.

Retail Investor

An individual who invests in the financial markets, typically in smaller amounts than institutional investors.

Liquidity

The ability of an asset to be quickly converted into cash without significantly affecting its value.

Venture Capital

Financing provided to startups and small businesses with perceived long-term growth potential.

What is the accounting equation?

The accounting equation is Assets = Liabilities + Equity.