MGT 160 Lecture Notes - Lecture 1: A Question Of Balance, General Partnership, Sole Proprietorship
Document Summary
Legal person distinct from owners and resident of state. Income taxed @ corporate rate, dividends taxed @ personal rate, dividends paid are not tax deductible. Taxed at personal leve, earnings flow throughl. Taxed at personal level, earnings flow through. Assets & liabilities at certain point in time. Have a life of within the year. Healthy fifrms usually have a positive net working capital. Ease of converting something to cash without losing significant value assets-liabilties=net worth/working capital. Note: flashvards will be helpful to remember all the formulas. Book value = balance sheet value os assets, liabilities, equity. Market value = true value, price at which assets, liabilities, equity can be bought/sold. Is one of most important pieces of info derived from financial statements. Cash flow from assets = operating cash flow- net capital spending-changes in nwc (net working capital) Useful for comparing financial info year to year.
