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average tax rate	Total taxes owed divided by total income. (See page(s) 64)
balance sheet	Financial statement that shows the value of the firm’s assets and liabilities at a particular time. (See page(s) 49)
book value	Net worth of the firm according to the balance sheet. (See page(s) 51)
cash flow from assets	Cash flow generated by the firm’s operations, after investment in working capital and fixed assets. Also called free cash flow. (See page(s) 58)
financing flow	Cash flow to bondholders and shareholders plus increase in cash balances; also equals cash flow to assets. (See page(s) 59)
free cash flow	Another term for cash flow from assets (See page(s) 59)
generally accepted accounting principles GAAP	Procedures for preparing financial statements
income statement	Financial statement that shows the revenues, expenses, and net income of a firm over a period of time. (See page(s) 54)
marginal tax rate	Additional taxes owed per dollar of additional income. (See page(s) 64)
statement of cash flows	Financial statement that shows the firm’s cash receipts and cash payments over a period of time. (See page(s) 56)