Financial Terms Main Page

This site contains comprehensive definitions for a wide range of terms that cover topics such as financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit...

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Intercompany loan

Loan made by one unit of a corporation to another unit of the same corporation.

Precautionary motive

A desire to hold cash in order to be able to deal effectively with unexpected events
that require cash outlay.

Refunding

The redemption of a bond with proceeds received from issuing lower-cost debt obligations
ranking equal to or superior to the debt to be redeemed.

Weighted average portfolio yield

The weighted average of the yield of all the bonds in a portfolio.

Bank overdraft

Money owed to the bank in a cheque account where payments exceed receipts.

Unearned revenue

Money that has been paid by customers for work yet to be done or goods yet to be provided.

economic integration

the creation of multi-country markets
by developing transnational rules that reduce the fiscal and
physical barriers to trade as well as encourage greater economic
cooperation among countries

material price variance

total actual cost of material purchased
minus (actual quantity of material  standard
price); it is the amount of money spent below (favorable)
or in excess (unfavorable) of the standard price for the
quantity of materials purchased; it can be calculated based
on the actual quantity of material purchased or the actual
quantity used

standard quantity allowed

the quantity of input (in hours or some other cost driver measurement) required at standard for the output actually achieved for the period

total expected value (for a project)

the sum of the individual cash flows in a probability distribution multiplied by their related probabilities

Reserve Requirement

Fraction of total deposits that a commercial bank is required by the central bank to hold in the form of reserves.

Multilevel bill of material

An itemization of all bill of material components, including
a nested categorization of all components used for subassemblies.

Reprocessed material

Material that has been reworked and returned to stock.

Market Risk

The part of security's risk that cannot be eliminated by diversification. It is measured by the beta coefficient.

Shareholder's Equity

Represents the total assets of a corporation less liabilities.