Finance Skills for Managers - D076 Questions and Answers 100% Correct

AccountingThe system of recording, reporting, and summarizing past financial information and transactions. Accounts Receivable Turnover (AR Turnover)An activity ratio found by credit sales divided by accounts receivable. Activity RatiosA category of ratios that measure how well a company uses its assets to generate sales or cash, showing the firm's operational efficiency and profitability. Additional Funds Needed (AFN)Another name for the discretionary financing needed or external financing needed. It represents the additional financing needed given a firm's expectations for future growth. Affirmative CovenantsA bond covenant that describes things the company pledges itself to do in order to protect bondholders. Agency CostsCosts that are incurred when management does not act in the best interest of shareholders. Agency ProblemWhen the agent (the management)