Chapter 13 Key Concepts:
· The two components of the stockholders’ equity section of the balance sheet
· What is retained earnings?
· Calculate ending retained earnings with information provided for the period
· What is treasury stock?
· Prepare a stockholders’ equity section of a balance sheet AFTER a stock dividend – like in class problem
Chapter 14 Key Concepts:
· Be able to interpret bond quotes – How much would you pay for a $1,000 bond trading at 95?
· Advantages and disadvantages of bond financing
· Why do bonds sell at discounts and premiums?
· Why do we amortize bond discounts and premiums?
· With information given, determine – like in class problems
o Cash proceeds from sale of bond
o Interest expense over life of bond
o Interest expense recorded in first interest period
Chapter 15 Key Concepts:
· Understand classification of investments and be able to classify an investment in the proper category:
o Trading security, available for sale, or held to maturity
o Significant influence, Controlling influence, Neither
o Short term V Long Term
· Know the basis for recording different securities – cost, market, equity method
· Foreign exchange valuations
· Realized V Unrealized gains and losses
Chapter 16 Key Concepts:
· What does the Statement of Cash Flow report?
· Be able to classify transactions as operating, investing, financing, or non-cash transactions
· Understand differences between direct and indirect methods for the preparation of the operating section of the cash flow statement
· Look at data from cash flow statements from different companies and assess which is in the strongest cash position and WHY
· Calculate cash flow on total assets
Chapter 17 Key Concepts:
· Understand what liquidity, solvency, market prospects and profitability measure
· Know which ratios measures which quality – liquidity, solvency, profitability, market prospects
· Understand how horizontal and vertical analysis works and the goals of each
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