SOPHIA LEARNING - PRINCIPLES OF FINANCE - GOALS
AND ORGANIZATIONS OF FINANCIAL MANAGEMENT.
Built around real course units and objectives.
Finance - Answer: The study of funds management and asset allocation over time.
Assets - Answer: Something or someone of any value. Economic resources that represent
the value of ownership that can be converted into cash.
Debtor - Answer: A person or firm that owes money. One in debt or one who owes a debt.
Shareholder - Answer: One who owns shares of a stock.
Liability - Answer: An obligation, debt, or responsibility owed to someone.
Investment - Answer: A placement of capital in expectation of deriving income or profit
from its use.
Capital - Answer: The means to acquire goods and services, especially in a non-barter
system.
Expected return - Answer: Considering the magnitude and likelihood of exogenous events,
the yield that an investor predicts they will earn on average.
Financing - Answer: A transaction that provides funds for a business.
Equity - Answer: The residual claim or interest to investors for assets after all liabilities are
paid.
APPHIA – Crafted with Care and Precision for Academic Excellence.
1
, Valuation - Answer: The process of estimating the market value of a financial asset or
liability.
Fundamental analysis - Answer: An analysis of a business with the goal of financial
projections in terms of income statement, financial statements and health, management
and competitive advantages, and competitors and markets.
Financial statement - Answer: A formal record of all relevant financial information of a
business, person, or other entity, presented in a structured and standardized manner to
allow easy understanding.
Market value - Answer: The total value of the company as traded in the market. Calculated
by multiplying the number of shares outstanding by the price per share.
Stakeholder - Answer: A person or organization with a legitimate interest in a given
situation, action, or enterprise.
Central banks - Answer: National banks that implement monetary policy, issue currency,
and provide banking services to the government and commercial banking systems of their
respective countries. In the US, this is the Federal Reserve.
Inflation - Answer: The general increase in prices and the decline in the purchasing power
of money.
Credit - Answer: A privilege of delayed payment extended to a buyer or borrower on the
seller's or lender's belief that what is given will be repaid.
Crowdfunding - Answer: Funding by many individuals pooling their money together for a
common goal, usually via the internet.
APPHIA – Crafted with Care and Precision for Academic Excellence.
2
AND ORGANIZATIONS OF FINANCIAL MANAGEMENT.
Built around real course units and objectives.
Finance - Answer: The study of funds management and asset allocation over time.
Assets - Answer: Something or someone of any value. Economic resources that represent
the value of ownership that can be converted into cash.
Debtor - Answer: A person or firm that owes money. One in debt or one who owes a debt.
Shareholder - Answer: One who owns shares of a stock.
Liability - Answer: An obligation, debt, or responsibility owed to someone.
Investment - Answer: A placement of capital in expectation of deriving income or profit
from its use.
Capital - Answer: The means to acquire goods and services, especially in a non-barter
system.
Expected return - Answer: Considering the magnitude and likelihood of exogenous events,
the yield that an investor predicts they will earn on average.
Financing - Answer: A transaction that provides funds for a business.
Equity - Answer: The residual claim or interest to investors for assets after all liabilities are
paid.
APPHIA – Crafted with Care and Precision for Academic Excellence.
1
, Valuation - Answer: The process of estimating the market value of a financial asset or
liability.
Fundamental analysis - Answer: An analysis of a business with the goal of financial
projections in terms of income statement, financial statements and health, management
and competitive advantages, and competitors and markets.
Financial statement - Answer: A formal record of all relevant financial information of a
business, person, or other entity, presented in a structured and standardized manner to
allow easy understanding.
Market value - Answer: The total value of the company as traded in the market. Calculated
by multiplying the number of shares outstanding by the price per share.
Stakeholder - Answer: A person or organization with a legitimate interest in a given
situation, action, or enterprise.
Central banks - Answer: National banks that implement monetary policy, issue currency,
and provide banking services to the government and commercial banking systems of their
respective countries. In the US, this is the Federal Reserve.
Inflation - Answer: The general increase in prices and the decline in the purchasing power
of money.
Credit - Answer: A privilege of delayed payment extended to a buyer or borrower on the
seller's or lender's belief that what is given will be repaid.
Crowdfunding - Answer: Funding by many individuals pooling their money together for a
common goal, usually via the internet.
APPHIA – Crafted with Care and Precision for Academic Excellence.
2
