Bank and Finance 1st Sem 2nd QT

• Sole Proprietorship: A business owned by one person.
• Sole Proprietorship: simplest form of business organization
• Sole Proprietorship: Limited to the life of the owner
• Sole Proprietorship: Taxed as personal income
• Sole Proprietorship: capital is limited to wealth of the owner
• Partnership: a business organized by two or more owners
• Partnership: Life of business lies on the partners
• Partnership: Income is reported as personal income of the partners
• General Partnership: profits and losses are shared by all partners, and everyone has unlimited liability for all business debts
• Limited Partnership: not actively participate in the management of the business
• Corporation: complicated form of business organization
• Corporation: juridical or legal person separate and distinct from its owners (stockholders)
• Corporation: contains many legal matters (Law)
• Managers: the one who run the corporate affairs for the interest of the stockholders
• Corporation: life of the business is not limited
• Service Business - products with no physical form. Mostly skills, field of expertise, and consultancy
• Merchandising type - "buy and sell". Buying products and selling at higher price
• Manufacturing type - buying raw materials and transforming into new products
• Financial Statement Analysis - involves assessment of company's past performance and future potentials
• Financial Statement Analysis - way of determining a company's strengths and weaknesses
• Liquidity - ability of the business to pay its currently maturing liabilities as they fall on its due date
• Solvency - ability to pay long-term liabilities
• Financial Stability - measures how a business can survive in the long run
• Profitability - earn the highest possible profit or return on its investment
• Asset Utilization - refers to how well the company is using its assets to generate sales or profit
• Horizontal Analysis - used to evaluate the current period performance of the firm to its previous performance
• Comparative Statements - used to evaluate changes or the behavior patterns of the different accounts in the financial statements for two or more years
• Trend Ratio - firm has to choose a year to represents the firm's activity as its base
• Vertical Analysis is used to evaluate each account in the statement of financial position and statement of comprehensive income and is presented as a ratio of the base amount in the financial statement.
• Common Size Statement is one account or item is considered as the base amount and will be compared to all other accounts or items.