Finance and Investments Unit 1

Front

Higher Risk is associated with greater probability of higher return and lower risk with a greater probability of smaller return

Back

Principle of Risk and Return

Front

Principle of Risk and Return is also known as

Back

Risk-Return Trade-off

Front

The concept that money available at the present time is worth more than the identical sum in the future due to its potential earning capacity

Back

Principle of the Time Value of Money

Front

Provided money can earn interest, any amount of money is worth more the sooner it is received

Back

Principle of the Time Value of Money

Front

We can calculate:

Present Value of Money

Future Value of Money

Back

Principle of the time Value of Money

Front

The net amount of cash and cash-equivalents being transferred into and out of a business

Back

Cast Flow

Front

A company creates value for shareholders by generating positive cash flows, or more specifically, maximize long-term free cash flow

Back

Cash Flow Principle

Front

The money the company has left over to expand the business or return to shareholders, after paying dividends, buying back stock, or paying off debt

Back

Free cash flow

Front

What is left of the revenue a business generates after it pays all expenses directly related to the generation of that revenue, and other expenses related to the conduct of the business activities

Back

Profit

Front

Refers to availability of cash with the company at any point of time

Back

Liquidity