FIN 300 Lecture Notes - Lecture 1: Private Equity, Cash Flow Statement, Financial Statement

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15 Sep 2017
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Financial markets: primary markets, the firm issues debt or equity securities to investors and receive cash in return, secondary markets. Investors trade securities between themselves; the firm is not involved: benefit the firm by, providing liquidity to investors, which makes issued securities more attractive, setting benchmark prices for future stick/debt offering. Financial institutions: provide financial services to individuals such as taking deposits, managing investments, brokering financial transactions or making loans, the main types of financial institutions are, banks and credit unions. Insurance companies: mutual funds, pension funds, hedge funds, venture capital funds, private equity funds. Balance sheet: accounting identity: assets = liabilities + equity, traditionally, assets are shown at book value: historical cost adjusted for depreciation. Securities: net working capital, measures ability to meet cash obligation over the next 12 months, net working capital = current assets current liabilities, usually positive in a healthy firm.

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