Capital Stock

• Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.

• An agency problem is a conflict of interest inherent in any relationship where one party is expected to act in the interests of the other.

• Appropriation is the act of allocating money for a particular purpose.

• Asset financing allows a company to obtain a loan by pledging its balance sheet assets.

• Asset and Liability Management Committees (ALMCs) are responsible for overseeing the asset and liability management of a company or bank.

• The Audit Committee consists of members of the company’s board of directors and oversees its financial reporting and reporting.

• The BCG Growth Share Matrix is an internal tool used by management to assess the current state of the value of a firm’s divisions or product lines.

• Management buyout (BIMBO) occurs when an external management team joins the company (buy-in) and also buys out the existing management team.

• A capital lease is a contract that gives the lessee the right to temporarily use an asset.

• Capital markets refer to places where funds are exchanged between providers and those seeking capital for their own use.

• A capital project is often a costly, long-term project to expand, maintain, or improve a significant portion of a property.

• The capital structure is how a company finances its overall operations and growth.

• Clawback is a contractual clause that requires the employee to return money already paid by the employer, sometimes with a penalty.

• A corporation charter is a document filed with a state secretary or registrar to establish a company as a corporation.

• Corporate finance is concerned with how businesses finance their activities in order to maximize profits and minimize costs.

• The cost of capital represents the return that a company must earn to justify the cost of a capital project such as buying new equipment or constructing a new building.

• Labor costs can be divided into two main categories: direct (manufacturing) and indirect (non-manufacturing) labor costs.

• A decision support system (DSS) is a computerized system that collects and analyzes data, synthesizing them to create comprehensive information reports.

– Analysts can estimate the demand for a product at any point on the demand curve. – Demand charts, used in conjunction with supply charts, provide a visual representation of the dynamics of supply and demand in the market.

• Demutualization occurs when a company structured as a mutual company goes into a corporation of shareholders.

• Downward round refers to a private company offering additional shares to be sold at a price lower than that at which they were sold in the previous funding round.

• The EBITDA/EV multiple is a financial valuation ratio used to calculate a company’s return on investment.

• Economic capital is the amount of capital a company needs to sustain any risks it takes. Essentially, it is a way to measure risk.

• The economic life of an asset is the period of time during which it remains useful to its owner.

• Equity represents the value that would be returned to the company’s shareholders if all assets were liquidated and all debts of the company were paid off.