A Business Owner Who Buys a Company Whose Financial Statements

question 2

True/False

A business owner who buys a company whose financial statements show a pattern of short-term profitability is guaranteed of getting a good deal.

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Definitions:

403b Plan

A tax-advantaged retirement savings plan available for public education organizations, some non-profit employers, and self-employed ministers in the United States.

Annual Return

The percentage change in an investment's value over a one-year period, including any dividends or interest payments.

Nominal Rate of Return

The rate of return on an investment without adjusting for inflation.

Real Future Value

The measure of the future value of an investment or stream of cash flows, adjusted for inflation, to reflect the actual purchasing power of that future amount.