WorksheetsFP I-Unit 3 Vocabulary
Total questions: 56
Worksheet time: 28mins
What is an annual report?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
A summary of a business's income and expenses over a period of time
A financial summary that states how much money has flowed into and out of a business
What are SEC filings?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
A summary of a business's income and expenses over a period of time
A financial summary that states how much money has flowed into and out of a business
What is EDGAR?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
Stands for Electronic Data Gathering and Retrieval; section of the SEC website in which all of the mandatory filings are housed
A financial summary that states how much money has flowed into and out of a business
What are financial statements?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
Summaries of accounting information; usually the balance sheet, income statement, and cash flow statement
A financial summary that states how much money has flowed into and out of a business
What is a balance sheet?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
A financial statement that captures the financial condition of the business at that particular moment
A financial summary that states how much money has flowed into and out of a business
What is an income statement?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
A summary of a business's income and expenses over a period of time; also known as a profit-and-loss statement
A financial summary that states how much money has flowed into and out of a business
What is a cash flow statement?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
A financial summary that states how much money has flowed into and out of a business
Summaries of accounting information; usually the balance sheet, income statement, and cash flow statement
What is stockholders' equity?
A document outlining the financial status of a business
A company's registration statements provided to the SEC
Assets minus liabilities; also known as shareholders' equity, book value, and net worth; sometimes referred to as equity
A financial summary that states how much money has flowed into and out of a business
What is a bond?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
A collection of shareholders' money that is invested in an assortment of different securities
A unique type of stock mutual fund that copies the performance of a particular stock market index
What does the interest rate/coupon rate represent for a bond?
The rate of interest that is earned on a bond
The dollar value of the stated bond
Predetermined time when you can claim your original investment
The 'borrower' of the invested money
What is the face value/par value of a bond?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
The rate of interest that is earned on a bond
The dollar value of the stated bond
Predetermined time when you can claim your original investment
When referring to a bond, what does the maturity date indicate?
The rate of interest that is earned on a bond
The dollar value of the stated bond
Predetermined time when you can claim your original investment
The 'borrower' of the invested money
Who is the issuer of a bond?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
The rate of interest that is earned on a bond
The dollar value of the stated bond
The 'borrower' of the invested money
What does yield represent for a bond?
The rate of interest that is earned on a bond
The dollar value of the stated bond
Predetermined time when you can claim your original investment
The 'borrower' of the invested money
What does bond rating indicate?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
The rate of interest that is earned on a bond
A 'letter score' assigned to a company based on the financial responsibility it has demonstrated
The 'borrower' of the invested money
What is a zero-coupon bond?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
A collection of shareholders' money that is invested in an assortment of different securities
A unique type of stock mutual fund that copies the performance of a particular stock market index
What do common stocks represent?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
Gives investors a basic share of ownership in the company as well as voting rights
Gives stockholders a basic share of ownership in the company. Entitled to fixed dividends. No voting rights.
What do preferred stocks represent?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
Gives investors a basic share of ownership in the company as well as voting rights
Gives stockholders a basic share of ownership in the company. Entitled to fixed dividends. No voting rights.
What are stock exchanges?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
A place where stocks are traded by brokers who represent buyers and sellers
A company's stock currently held by all its shareholders
What does shares outstanding represent?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
A place where stocks are traded by brokers who represent buyers and sellers
The total value of a company's outstanding shares
What does market capitalization represent?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
The total value of a company's outstanding shares
A collection of shareholders' money that is invested in an assortment of different securities
Exchange Traded Funds are:
“cousins” of bond funds that trade like individual
stocks. When you invest in an ETF, you buy shares in
an entire stock portfolio.
“brothers” of mutual funds that trade like individual
stocks. When you invest in an ETF, you buy shares in
an entire stock portfolio.
“cousins” of mutual funds that trade like individual
stocks. When you invest in an ETF, you buy shares in
an entire stock portfolio.
“cousins” of stock funds that trade like individual
stocks. When you invest in an ETF, you buy shares in
an entire stock portfolio.
What is a mutual fund?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
A collection of shareholders' money that is invested in an assortment of different securities
A unique type of stock mutual fund that copies the performance of a particular stock market index
What is an index fund?
A piece of paper that says the governing body or corporation will borrow your money at a particular interest rate for a particular period of time
A debt security that doesn't pay interest but is traded at a deep discount
A unique type of stock mutual fund that copies the performance of a particular stock market index
A collection of shareholders' money that is invested in an assortment of different securities
Which ratios measure how efficiently a company manages its assets?
Asset management ratios
Liquidity ratios
Debt ratios
Profitability ratios
Which ratios measure the ability of a company to turn assets into cash to pay its bills?
Asset management ratios
Liquidity ratios
Debt ratios
Profitability ratios
Which ratios compare what a company owns to what it owes?
Asset management ratios
Liquidity ratios
Debt ratios
Profitability ratios
Which ratios measure the ability of a company to make a profit?
Asset management ratios
Liquidity ratios
Debt ratios
Profitability ratios
What does Profit Margin represent?
The percentage of sales that a company gets to keep as profit
The price-earnings ratio of a company
The earnings per share of a company
The return on equity of a company
What does PE ratio indicate?
How efficiently a company manages its assets
The ability of a company to turn assets into cash
The price investors are willing to pay for each dollar of earnings
The profit that goes to each share of common stock
What does EPS measure?
How efficiently a company manages its assets
The ability of a company to turn assets into cash
The price investors are willing to pay for each dollar of earnings
The profit that goes to each share of common stock
What does ROE indicate?
How efficiently a company manages its assets
The ability of a company to turn assets into cash
The price investors are willing to pay for each dollar of earnings
The profit that goes to each share of common stock
What does PEG ratio compare?
PE to earnings growth. The idea is to see if
expectations about earnings (PE) match the evidence
for those expectations (earnings growth).
Asset management ratios to liquidity ratios
Debt ratios to profitability ratios
Profit margin to ROE
What is fundamental analysis?
Studying all aspects of a company to understand its intrinsic value
A measure of how much risk you're willing to accept in exchange for potentially higher returns
Less than five years
Between 5 and 15 years from now
What is risk tolerance?
Studying all aspects of a company to understand its intrinsic value
A measure of how much risk you're willing to accept in exchange for potentially higher returns
Less than five years
Between 5 and 15 years from now
What is a short-term time horizon?
Studying all aspects of a company to understand its intrinsic value
A measure of how much risk you're willing to accept in exchange for potentially higher returns
Less than five years
Between 5 and 15 years from now
What is an intermediate-term time horizon?
Studying all aspects of a company to understand its intrinsic value
A measure of how much risk you're willing to accept in exchange for potentially higher returns
Less than five years
Between 5 and 15 years from now
What is a long-term time horizon?
Studying all aspects of a company to understand its intrinsic value
A measure of how much risk you're willing to accept in exchange for potentially higher returns
At least 10-15 years and possibly as long as 40-50 years
Between 5 and 15 years from now
What is liquidity?
The ease with which you can convert your investment dollars back into cash
A measure of how much risk you're willing to accept in exchange for potentially higher returns
Less than five years
Between 5 and 15 years from now
What are tax-deferred retirement plans?
Studying all aspects of a company to understand its intrinsic value
Allow you to deposit money into an investment account and hold off on paying the taxes on it until you start using the money
Less than five years
Between 5 and 15 years from now
What is a 401(k)?
Studying all aspects of a company to understand its intrinsic value
Employer offered tax-deferred retirement plans. As an employee, you can contribute your pre-tax income to the account
Less than five years
Between 5 and 15 years from now
What are Individual Retirement Accounts (IRAs)?
Studying all aspects of a company to understand its intrinsic value
Tax-deferred retirement plans, usually for people who are not covered by an employer-sponsored plan
Less than five years
Between 5 and 15 years from now
What is a Roth IRA?
Studying all aspects of a company to understand its intrinsic value
Retirement plan where contributions are made with after-tax dollars. Do not pay taxes upon distribution
Less than five years
Between 5 and 15 years from now
What is market value?
What a company is worth from an accounting point of view
A measure of how much risk you're willing to accept in exchange for potentially higher returns
Less than five years
Between 5 and 15 years from now
What is book value?
What a company is worth from an accounting point of view
A measure of how much risk you're willing to accept in exchange for potentially higher returns
Less than five years
Between 5 and 15 years from now
What is intrinsic value?
What a company is worth from an accounting point of view
A measure of how much risk you're willing to accept in exchange for potentially higher returns
A company's actual, fair worth
Less than five years
What is a qualitative measure?
A thorough examination of a company's financial statements, using comparisons and ratios to determine financial health
Subjective, include an assessment of the company's product mix, the level of competition, management, strategy, and the strength of its brand
Less than five years
Between 5 and 15 years from now
What is a quantitative measure?
A thorough examination of a company's financial statements, using comparisons and ratios to determine financial health
Subjective, include an assessment of the company's product mix, the level of competition, management, strategy, and the strength of its brand
Less than five years
Between 5 and 15 years from now
What term describes stocks that are considered to be too expensive given their fundamentals?
Overvalued
Undervalued
Earnings per share
Profitability
What term describes stocks that are considered to be undervalued or 'on sale'?
Overvalued
Undervalued
Earnings per share
Profitability
Which financial metric measures what percentage of sales is left after subtracting the direct cost of producing the goods?
Gross profit margin
Net profit margin
Return on equity
Earnings per share
Which financial metric, also known as the 'bottom line', considers all aspects of running the business and sums up in one number how well the managers extract a profit from each dollar of sales?
Gross profit margin
Net profit margin
Return on equity
Profitability
Which financial metric measures management's skill in turning your investment into profit?
Gross profit margin
Net profit margin
Return on equity
Profitability
Which financial metric measures how much profit goes to each share of common stock?
Gross profit margin
Net profit margin
Return on equity
Earnings per share
What does P/E ratio stand for?
Price-earnings
Price-earnings and growth
Earnings per share
Profitability
What does PEG ratio add to the P/E ratio?
Overvalued
Undervalued
Earnings per share
Growth
