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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Back fee

The fee paid on the extension date if the buyer wishes to continue the option.

Cash conversion cycle

The length of time between a firm's purchase of inventory and the receipt of cash
from accounts receivable.

Hedge

A transaction that reduces the risk of an investment.

Monetary policy

Actions taken by the Board of Governors of the Federal Reserve System to influence the
money supply or interest rates.

Utility value

The welfare a given investor assigns to an investment with a particular return and risk.

Variable rated demand bond (VRDB)

Floating rate bond that can be sold back periodically to the issuer.

Furniture

The cost of furniture owned by the company.

ad hoc discount

a price concession made under competitive pressure (real or imagined) that does not relate to quantity purchased

cost reduction

the practice of lowering current costs, especially
those that may be in excess of what is necessary

limited liability partnership

an organizational form that is a hybrid of the corporate and partnership organizational
forms and used to limit the personal liability of the owners;
it is typically used by large professional (such as accounting) firms

value

the characteristic of meeting the highest number of customer
needs at the lowest possible price

Debt Capacity

An assessment of ability and willingness to repay a loan from anticipated future cash flow or other sources.

Merchant Bank

A financial institution that engages in investment banking functions, such as advising clients in mergers and acquisitions, underwriting securities and taking debt or equity positions.

Overdraft

The amount by which a check or other payments exceeds the funds on deposits.

Job Loss Insurance (Credit Insurance)

Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing.