STUDY FOR BUSINESS

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A measure of the ability of a debtor to pay their debts as and when they fall due.  It is usually expressed as a ratio or a percentage of current liabilities .

This compares assets, which will become liquid within approximately twelve months (i.e. total current assets) with liabilities which will be due for payment in the same period (i.e. total current liabilities) as is intended to indicate whether there are sufficient short-term assets to meet the short term liabilities.     Current Ratio = Current Assets ÷ Current Liabilities

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Amortization The steady exclusion of a liability, such as a mortgage, in regular payments over a precise period of time. Such payments must be enough to cover both principal and interest.

Sinking Fund: A fund into which a company positions aside money over time, in order to leave its preferred stock, bonds or debentures. A fund into which a company positions away money over time, in order to leave its preferred stock, bonds or debentures. In the case of bonds, incremental payments into the sinking fund can often the financial impact at maturity. sponsor prefer bonds and debentures backed by sinking funds because there is less risk of a default.

Bond: A bond is a fixed interest financial asset issued by governments, organizations, banks, public utilities and other large entities. Bonds pay the holder a fixed amount a particular end date. A discount bond gives the bearer only at the ending date, while a coupon bond pays the bearer a fixed amount above a specified interval (month, year, etc.) as well as paying a fixed amount at the end date.

Liability:  An obligation to pay an amount in money, goods, or services to another party. The balance sheet lists the liabilities. Also called debt. Compare asset. See also contingent liability, current liability.

Note Receivable: A debt unpaid from borrowers and indications by a written guarantee of payment. Note receivable, an entry on the asset side of several company balance sheets, specifies the dollar amount of loans due to be repaid by borrowers.

Mortgage Loan: A loan protected by the collateral of a number of particular real estate property which compel the borrower to make a prearranged series of payments.

Marketable Security A security that may be purchased or sold. normally, a marketable security is operated on the secondary market, but the original sale of such a security acquires on the main market. Marketable securities may be low-risk, such a Treasury bonds, or high-risk, such as stocks. They are also known as negotiable securities

Treasury Stock The shares of a company’s stock that have been issued and then repurchased. Treasury stock is not measured in paying dividends, voting, or conniving earnings per share. It may be retired or reissued.

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Items on a company's balance sheet—the tangible property used in the business and not for resale; would include buildings, furniture, fixtures, equipment, and land.

In accounting , anything of value that a person or firm buys . Assets can be physical, such as real estate or stocks , a claim on debts , such as accounts receivable or liens , or a right, such as a patent . Of crucial importance to assets is their relative liquidity , or the ease with which they can be converted to cash . Liquid assets are often thought to be more useful than illiquid assets. From http://financial-dictionary.thefreedictionary.com