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Financial Mgmt 2
11 Business Innovations Financial Management 2 terms
Term | Definition |
---|---|
Short-term Financing | Financing typically for less than 1 year. |
Long-term Financing | Financing generally for more than 5 years and involves higher interest rates due to greater risk. |
Trade Credit | A type of short-term financing where a supplier allows the buyer to pay at a later date. |
Bank Overdrafts | A short-term loan arrangement allowing a company to withdraw more money than it has in its account. |
Fixed Assets | Assets such as land, buildings, and machinery that are long-term in nature. |
Balance Sheet | A financial statement that provides a snapshot of what a company owns (assets) and owes (liabilities) at a specific point in time. |
Equity | The shareholders' stake in the company, calculated as assets minus liabilities. |
Factoring | The process of selling accounts receivable to a third party at a discount. |
Collateral | Assets pledged as security for a loan. |
Current Liabilities | Short-term financial obligations that are due within one year, such as accounts payable and salaries payable. |