Financial Management Flashcard

Front

The goal of financial management is to:

Back

Maximize value for shareholders.

Front

A liquid asset is one that:

Back

Can be quickly converted into cash with little risk.

Front

What is the principle that higher returns are associated with greater risks?

Back

Risk-return trade-off

Front

Which term describes net income reinvested in the firm?

Back

Retained earnings

Front

What are funds provided by owners of a company called?

Back

Equity financing

Front

What measures a firm's ability to meet short-term obligations?

Back

Liquidity ratios

Front

What is the mix of equity and debt used to finance a firm’s permanent needs?

Back

Capital structure

Front

Which term refers to the funds provided by owners of a company?

Back

Equity financing

Front

What is the term for a financial tool to evaluate long-term investment proposals?

Back

Net present value (NPV)

Front

Financial leverage refers to:

Back

The degree to which a firm relies on debt financing.