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...

• Browse terms by the Alphabetical Index:
  1 4 A B C D E F G H I J K L M N O P Q R S T U V W Y Z

• Search terms for definitions using keywords:
  Keyword(s):

Monthly Financial Term Picks:

Capital market

The market for trading long-term debt instruments (those that mature in more than one year).

Exchange of stock

Acquisition of another company by purchase of its stock in exchange for cash or shares.

Liquidity risk

The risk that arises from the difficulty of selling an asset. It can be thought of as the difference
between the "true value" of the asset and the likely price, less commissions.

Market impact costs

Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.

Strip mortgage participation certificate (strip PC)

Ownership interests in specified mortgages purchased
by Freddie Mac from a single seller in exchange for strip PCs representing interests in the same mortgages.
Stripped bond Bond that can be subdivided into a series of zero-coupon bonds.

Taxable acquisition

A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
treated as having sold their shares.

Trading paper

CDs purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket.

Process costing

A method of costing for continuous manufacture in which costs for an accounting compared are compared with production for the same period to determine a cost per unit produced.

Allowance method

A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.

conversion

the process of transformation or change

direct material

a readily identifiable part of a product; the cost of such a part

feasible region

the graphical space contained within and on
all of the constraint lines in the graphical solution to a linear
programming problem

intranet

a mechanism for sharing information and delivering data from corporate databases to the local-area network (LAN) desktops

aging schedule

Classification of accounts receivable by time outstanding.

Guarantee

To take responsibility for payment of a debt or performance of some obligation if the person primarily liable fails to perform.