Management and Organizational Studies 2310A/B Study Guide - Midterm Guide: Corporate Finance, Reserve Requirement, Sole Proprietorship

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2310A/B
• Professor: Nicholas Kahnert

Document Summary

Capital budgeting: the decisions regarding question #1, how and where should the firm invest its money. Does the value of the cash flow generated by an asset outweigh the cost of that asset. Capital structure: the mixture of short term debt, long term debt, and equity that a firm a firm uses to finance its activities. 2 questions: what proportion of each and what is the cheapest sources. Working capital management: planning and managing the firm"s current assets and liabilities. Net working capital: how much short term cash flow does a company require to pay its bills. Common size: everything as a percentage of assets (bs), sales (is) or source or use (cfs), good when comparing one business to another. Common base: everything is relative to a base year, useful when comparing a company y-o-y. Combined: we eliminate the effect of overall growth by first forming common size statements and then comparing y-o-y (this highlights margin changes etc. )