Final Exam Review Chapters EBD-301 Accounting and Finance For Entrepreneurs
Chapter 6 B ASICS OF B USINESS T AXATION How does the IRS distinguish between a hobby and a business? What is a qualified joint venture? How do the couple file their returns? How are the profits of an S-corporation taxed? A C-corporation? How are LLC’s treated by the IRS when they have 1 member? 2 members?
Chapter 7 Forms of Business and Personal Liability Which form has the greatest personal liability? The least? What does it mean to when the court of law pierces the corporate veil ? Must a business be run on a full time basis? Are there special considerations? Do partners share the same level of liability?
Chapter 8 Time Value of Money How to calculate a simple future value. How to calculate a simple present value. How to calculate the future value (accumulation) of a savings plan; i.e., an IRA investment. How to annuitize the accumulation. How to calculate the present value of a series of future payments to be received. How to calculate a loan payment.
Chapter 9 Analysis, Forecasting, Control, BEP Analysis 3 major reasons why businesses fail. Objectives of Market Analysis. Why is market segmentation important? Objectives for Financial Planning Importance of Cash Budget Rationales for Breakeven Point Analysis
Chapter 10 Business Valuation 5 Problem areas in valuing a small business 3 Methods for Valuing a small or new business Value of Assets Estimating Earnings Potential Discounted Cash Flow (using the weighted average cost of capital Simple Rule of Thumb Method: Earnings Multiplier based on an Expected Rate of Return (EROR)
C HAPTER 11 F INANCING C HANGES IN S-T A SSET I NVESTMENTS Reasons for borrowing Sources of Short-Term Financing Spontaneous Planned Consideration Factors Importance of Cash Conversion Cycle Forms of Trade Credit (financing inventory)
Chapter 12 F INANCIAL A NALYSIS OF B USINESS O PERATIONS Objectives of FA: Key areas of owner interest Five Major Ratio Categories and Objectives Liquidity (CR, QR) Asset management (DSO, ITO) Debt Management (DR, TIE) Profitability (GPM, OPM, NPM) Investment Performance (ROA, ROE) DuPont System: Objective, Focal Points NPM, TATO, EM ROE = ROA * EM
Chapter 13 Managing Bankruptcy and Insolvency Issues 4 Important Chapters Ch. 5: Rule of Absolute Priority – Satisfaction of Claims Ch. 7: Liquidation Ch. 13: Individuals Ch. 11: Businesses Definitions of Business Failure / Causes Conditions for Out-of-Court Remedies