define financial flexibility - answer-a company ability to adapt to unforseen events
solvency - answer-ability to pay long term obligation
leverage - answer-using debt to increase earnings for owners
operating capability - answer-a companies ability to continue operations as it has in the ...
define financial flexibility - answer-a company ability to adapt to unforseen events
solvency - answer-ability to pay long term obligation
leverage - answer-using debt to increase earnings for owners
operating capability - answer-a companies ability to continue operations as it has in
the past
5 stages of life cycles - answer-development
introduction
growth
maturity
decline
characteristics of development stage - answer-spending lots of money on R&D
characteristics of companies in the introduction stage - answer-focusing on creating
demand, selling, advertising, and promotion
characteristics of growth stage (2 types) - answer-organic-internal expansion. uses
investments in PPE
external-vertical and horizontal growth. acquisitions and joint ventures
characteristics of maturity stage - answer-return of capital to investors by dividends
and buying back treasury stock
operating capability ratios - answer-estimated life of assets
estimated age of assets
remaining life of assets
Capex multiple
how can a company be engaged in activities in more than one stage? - answer-
autozone is expanding into new stores which would be growth stage but they are
also buying back treasury stock and paying dividends like a mature company
What are marketable securities - answer-short term investments in other companies.
less than 20% ownership in another company. Can be classified as TS, AFS, or
HTM
equity method investments or joint ventures - answer-20-50% ownership in another
company
record proportional equity on books
consolidated entities - answer-over 50% control in another company.
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