Finance and Accounting Concepts

These flashcards cover key concepts related to stock types, dividends, earnings metrics, and cash flow analysis, as outlined in the lecture notes.

Common Stock

Equity securities that represent ownership in a corporation and come with voting rights.

Preferred Stock

Equity securities that provide dividends before common stockholders and typically do not carry voting rights.

Dividends

Payments made by a corporation to its shareholders, usually in the form of cash or additional stock.

Retained Earnings

The accumulated portion of a company's profit that is retained for reinvestment rather than paid out as dividends.

Earnings per Share (EPS)

A financial measure calculated by dividing net income by the number of outstanding shares.

Price-Earnings Ratio

A valuation ratio calculated by dividing the market price per share by the earnings per share.

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Treasury Stock

Shares that were once a part of the outstanding shares of a company but were later repurchased by the company.

Statement of Cash Flows

Financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.

Indirect Method

A way of computing cash flows from operating activities that adjusts net income for changes in balance sheet accounts.