1. Bluff Numbers Day Three 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 3012345678910111213 14151617181920212223 24252627282930 3131 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 4832333435363738394041 42434445464748 4949 50 51 52 53 54 55 5650 515253545556

2. This balance indicates the value of the owner’s investment a company has on its books at the beginning of the statement period. beginning capital balance

3. This balance indicates the value of the owner’s investment a company has on its book at the end of the statement period. This amount needs to be compared with the owner’s equity balance on the balance sheet. ending capital balance

4. A statement that portrays how much the owner invested (contributed or put in), how much he withdrew (took out), and how the net income or net loss of the business increased or decreased the value of the owner’s overall investment (or worth) in the business for a period of time. statement of changes in owner’s equity

5. Beginning capital balance + Investments + Net Income (or – Net Loss) – Withdrawals = Ending Capital Balance statement of changes in owner’s equity equation

6. What an entity (a business or other enterprise) owns. asset

7. A statement that lists the assets, liabilities, and owner’s equity. It displays a company’s collateral and liquidity. balance sheet

8. Assets = Liabilities + Owner’s Equity balance sheet equation

9. Assets held by a company but pledged to a lender to secure a loan; in cases where the company doesn’t honor its debt, the lender can take possession of collateralized assets. collateral

10. What an entity owes. liability/liabilities

11. The value of an owner’s investment in her company. owner’s equity

12. Accounts that have been brought to a $0 balance at the end of an accounting period. closed accounts

13. Entries made in the journal at fiscal year end and then posted to the ledger that bring the account to a $0 balance and transfer net income or net loss and withdrawals to the capital account. closing entries

14. The process of bringing a $0 balance to all temporary accounts by crediting debit balances and debiting credit balances and transferring those balances to the capital account. closing the books

15. When a journal entry has more than one debit or more than one credit. compound entry

16. Assets, liabilities, and capital. They are not closed at the end of the fiscal year. The balances are carried forward to the beginning of the next fiscal year. permanent accounts

17. A list of permanent accounts that carry balances over to the next fiscal year. The post-closing trial balance verifies that the general ledger is still in balance after closing entries have been posted. post-closing trial balance

18. The revenue, expense, and withdrawals accounts. They accumulate financial data for one fiscal year. temporary accounts

19. Each account on the same financial statement is compared to itself for various years and analyzed based on trends observed, as well as compared to industry averages. This analysis is broad. horizontal analysis

20. Net Income ÷ Sales (or Revenue) = Return on Sales The return on sales ratio compares how much a company kept (net income) out of how much the company earned (revenue). return on sales ratio (or net income margin)

21. Compares each section of a statement in terms of parts and wholes. For example, the whole revenue section of the income statement is 100%. Each line item on the income statement is compared with total revenue to see where revenue is coming from and where it is being spent. A comparison with industry averages is also informative. vertical analysis

22. A long-term loan from the Small Business Administration. 504 loan

23. An investor who uses her own money for startup capital for a business, usually in exchange for a share of ownership. angel investors

24. A loan secured by a company’s assets. asset-based loans

25. A loan from a bank, usually at a fixed interest rate and for a predetermined period of time. bank term loans

26. Financial organizations that provide services to underserved areas, including investment capital, credit unions, and personal loans. CDFIs (Community Development Financial Institutions)

27. An investor buys a piece of equipment that a business needs, and then leases it to the business equipment leasing

28. A loan from the federal government for developing startup businesses. federal government venture capital

29. The first time a business sells stock (a share in the company) to the public. initial public offering

30. Investment capital from firms that specialize in business investment, usually for a very large amount of money. institutional venture capital

31. A very small loan to an entrepreneur who, because of a lack of assets or a credit history, would not ordinarily be able to get one. microloans

32. A guarantee by an investor of repayment of a bank loan to a business that would not otherwise be able to get a loan. private loan guarantees

33. A loan to a business in which the lender gets a percentage of future sales. royalty financing

34. The Small Business Administration guarantees up to 80% of a bank loan to a business that would not otherwise be able to get a loan. SBA-guaranteed loans

35. Money needed for the daily operations of the business, such as purchasing supplies. It is generally repaid in less than one year. short-term financing

36. An agreement in which an underwriter will use all efforts to sell as much of an issue as possible to the public. best efforts underwriting

37. Securities representing part ownership in a corporation, providing voting rights, and entitling the holder to a share of the company’s success through dividends and/or capital appreciation. Common stock

38. A portion of a company’s profits that is paid out to its shareholders. Dividends

39. A securities firm that helps corporations sell securities to the public. Investment bank

40. Capital stock that provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock. Preferred stock

41. A document that must be filed with the federal Securities and Exchange Commission (SEC) and made available to potential investors before stock can be sold Prospectus

42. A model in economics that determines the price and quantity of a product or service sold supply and demand

43. An investment bank or syndicate of investment banks that attempts to sell securities for an issuing company in the primary market. underwriting

44. A feature available for most bonds and preferred stocks that gives the issuer the ability to buy the security back from investors before the scheduled date of maturity. A surcharge might be assessed to the issuer if the security is repurchased. callable

45. Interest upon interest, where accrued interest is added to the principal sum, and the whole treated as new principal, for the calculation of the interest for the next period. compound interest

46. The stated percentage rate of interest on a bond, which is usually paid out twice a year. Coupon rate

47. The percentage paid out from a stock dividend or interest payments made on a bond, stated in terms of the current market price of the security. Current yield

48. Unsecured bonds that are only issued by creditworthy firms Debenture bonds

49. A situation that occurs when the price of a bond is lower than its par value. This is because the bond is paying at an interest rate lower than what is presently being paid by similarly rated bonds. discount

50. The specified final amount that an issuer promises to pay to the owner of a bond at the date of maturity. Also called par value. Face value

51. Securities whose nominal (or current dollar) yield is fixed or determined with certainty at the time of purchase, typically debt securities. fixed income securities

52. The date on which an issuer of a bond promises to repay the full amount borrowed. Maturity date

53. A bond that is secured by a guarantee of real property. Mortgage bonds

54. A situation that occurs when the value of a bond exceeds its principal amount premium

55. The sale of new securities, typically bonds or preferred stock, directly to a group of investors or institutional investors, such as banks, pension funds, or insurance companies. Private placement

56. Preferred securities and bonds that receive higher priority for payment than common stock when a company is liquidated. Senior securities

57. Municipal, corporate, or treasury bonds that pay no annual interest over the life of the bond, are offered at a deep discount to par value, and are redeemed at full value upon maturity. The investor’s return on investment comes when redeeming the bond at its face value. zero-coupon bonds