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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Monthly Financial Term Picks:

Agencies

Federal agency securities.

Backwardation

A market condition in which futures prices are lower in the distant delivery months than in
the nearest delivery month. This situation may occur in when the costs of storing the product until eventual
delivery are effectively subtracted from the price today. The opposite of contango.

Convertible preferred stock

Preferred stock that can be converted into common stock at the option of the holder.

Euro straight

A fixed-rate coupon Eurobond.

Funding ratio

The ratio of a pension plan's assets to its liabilities.

Perfected first lien

A first lien that is duly recorded with the cognizant governmental body so that the lender
will be able to act on it should the borrower default.

Self-liquidating loan

Loan to finance current assets, The sale of the current assets provides the cash to repay
the loan.

Series

Options: All option contracts of the same class that also have the same unit of trade, expiration date,
and exercise price. Stocks: shares which have common characteristics, such as rights to ownership and voting,
dividends, par value, etc. In the case of many foreign shares, one series may be owned only by citizens of the
country in which the stock is registered.

Target firm

A firm that is the object of a takeover by another firm.

TBA (to be announced)

A contract for the purchase or sale of a MBS to be delivered at an agreed-upon
future date but does not include a specified pool number and number of pools or precise amount to be
delivered.

CASH FLOWS FROM INVESTING ACTIVITIES

A section on the cashflow statement that shows how much cash came in and went out because of various investing activities like purchasing machinery.

Free Cash Flow

The funds available for distribution to the capital providers of the
company after investments inside the company have been made

piece rate

a pay plan in which workers are paid a flat rate
for each unit of work accomplished

Cost depletion

A method of expensing the cost of a resource consumed by first determining
the total investment in the resource (such as the procurement of a coal mine),
then determining the total amount of extractable resource (such as tons of available
coal), and then assigning costs to each consumed unit of the resource, based on the
proportion of the total available amount that has been used.

Risk-Free Rate

The rate of return obtainable on government of Canada treasury bills.