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| A report issued annually by a corporation to its stockholders. It contains basic financial statements as well a management's analysis of the firm's past operations and future prospects. |
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| A statement of a firm's financial position at a specific point in time. |
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| Current assets minus accounts payable and accruals. |
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| A report summarizing a firm's revenues, expenses, and profits during a reporting period, generally a quarter or a year. |
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| Earnings from operations before interest and taxes. |
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| The charge to reflect the cost of assets used up in the production process. Depreciation is not a cash outlay. |
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| A noncash charge similar to depreciation except that it is used to write off the costs of intangible assets. |
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| Earnings before interest, taxes, depreciation, and amortization. |
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| A report that shows how things that affect the balance sheet and income statement affect the firm's cash flows. |
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| Statement of Stockholders' Equity |
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| A statement that shows by how much a firm's equity changed during the year and why this change occurred. |
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| The amount of cash that could be withdrawn from a firm without harming its ability to operate and to produce future cash flows. |
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| A tax system where the tax rate is higher on higher incomes. The personal income tax in the United States which ranges from 0% on the lowest incomes to 35% on the highest incomes, is progressive. |
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| The tax rate applicable to the last unit of a person's income. |
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| Taxes paid divided by taxable income. |
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| The profit (loss) from the sale of a capital asset for more (less) than its purchase price. |
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| Alternative Minimum Tax (AMT) |
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| Created by Congress to make it more difficult for wealthy individuals to avoid paying taxes through the use of various deductions. |
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| Tax Loss Carry-Back or Carry-Forward |
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| Ordinary corporate operating losses can be carried backward for 2 years and carried forward for 20 years to offset taxable income in a given year. |
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| A small corporation that, under Subchapter S of the Internal Revenue Code, elects to be taxed as a proprietorship or a partnership yet retains limited liability and other benefits of the corporate form of organization. |
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