Cash Flow

• 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.

• Share capital is the number of ordinary and preferred shares that the company has the right to issue and which are accounted for on the balance sheet as part of share capital.

• 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.