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Financial Terms | |
activity |
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Definition of activityactivitya repetitive action performed in fulfillment of business functions
Related Terms:activity analysisthe process of detailing the various repetitive actions that are performed in making a product or Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and Activity-based costingA method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers. activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns ![]() activity-based management (ABM)a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received activity centera segment of the production or service activity drivera measure of the demands on activities and, Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Asset activity ratiosRatios that measure how effectively the firm is managing its assets. business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay non-value-added (NVA) activityan activity that increases the time spent on a product or service but that does not increase its worth or value to the customer value-added (VA) activityan activity that increases the worth of the product or service to the customer ABCsee activity-based costing ABMsee activity-based management Aggressive Cost CapitalizationCost capitalization that stretches the flexibility within generally AllocationThe process of storing costs in one account and shifting them to other applied overheadthe amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for this amount are to an overhead account attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute Bank for International Settlements (BIS)An international bank headquartered in Basel, Switzerland, which break-even point (BEP)the level of activity, in units or dollars, at which total revenues equal total costs BudgetA detailed schedule of financial activity, such as an advertising budget, a sales budget, or a capital budget. BudgetA plan expressed in monetary terms covering a future period of time and based on a defined budgeta financial plan for the future based on a single level capacitya measure of production volume or some other activity base capital budgetinga process of evaluating an entity’s proposed contract vendoran external party that has been granted an contribution marginthe difference between selling price and control charta graphical presentation of the results of a core competencya higher proficiency relative to competitors Cost driverThe most significant cause of the cost of an activity, a measure of the demand for an activity cost drivera factor that has a direct cause-effect relationship Cost driverA factor that directly impacts the incidence of a cost, and which is generally Cost objectAn item for which a cost is compiled. For example, this can be a product, DepressionA prolonged period of very low economic activity with large-scale unemployment. discretionary costa cost that is periodically reviewed by a e-commerce (electronic commerce)any business activity that uses the Internet and World Wide Web to engage in financial transactions engineered costa cost that has been found to bear an observable Fiscal PolicyA change in government spending or taxing, designed to influence economic activity. fixed costa cost that remains constant in total within a specified Fixed costA cost that does not vary in the short run, irrespective of changes in any fixed expenses (costs)Expenses or costs that remain the same in amount, Fixed overheadThat portion of total overhead costs which remains constant in size flexible budgeta presentation of multiple budgets that high-low methoda technique used to determine the fixed Implicit ContractAn unwritten understanding between two groups, such as an understanding between an employer and employees that employees will receive a stable wage despite business cycle activity. Indirect costA cost that is not directly associated with a single activity or event. Such IndustryThe category describing a company's primary business activity. This category is usually determined InfrastructureBasic facilities, such as transportation, communication, and legal systems, on which economic activity depends. just-in-time (JIT)a philosophy about when to do something; LiquidityA market is liquid when it has a high level of trading activity, allowing buying and selling with Margin of safetyA measure of the difference between the anticipated and breakeven levels of activity. Market timing costsCosts that arise from price movement of the stock during the time of the transaction mixed costa cost that has both a variable and a fixed component; Monetary PolicyActions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity. National Income and Product AccountsThe national accounting system that records economic activity such as GDP and related measures. operating activitiesIncludes all the sales and expense activities of a business. Operating incomeThe net income of a business, less the impact of any financial activity, Pareto analysisThe 80:20 ratio that states that 20% of the variables included in an predetermined overhead ratean estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate predictoran activity measure that, when changed, is accompanied RecessionLoosely speaking, a period of less-than-normal economic growth. Technically, a downturn in economic activity in which real GDP falls in two consecutive quarters. Relevant rangeThe upper and lower levels of activity within which the business expects to be operating within the short-term planning horizon (the budget period). relevant rangethe specified range of activity over which a scarce resourcea resource that is essential to production scattergrapha graph that plots all known activity observations Secondary MarketNew security issues are first sold directly to the public by the issuing firm or the government. After this initial sale, the owners of the securities can trade them among themselves or others; such activity is said to take place on the secondary market. Semi-fixed costs Costs that are constant within a defined level of activity but that can increase or decrease when SICAbbreviation for Standard Industrial Classification. Each 4-digit code represents a unique business activity. step costa cost that increases in distinct amounts because of increased activity Supply-Side EconomicsView that incentives to work, save, and invest play an important role in determining economic activity by affecting the supply side of the economy. TurnoverMutual Funds: A measure of trading activity during the previous year, expressed as a percentage of Underground EconomyEconomic activity not observed by tax collectors and government statisticians. variable costa cost that varies in total in direct proportion Variable costA cost that changes in amount in relation to changes in a related activity. variable overhead efficiency variancethe difference between budgeted variable overhead based on actual input activity and variable overhead applied to production variable overhead spending variancethe difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity VelocityThe number of times during a year that the money supply turns over in supporting that year's economic activity, measured as the ratio of nominal income to the money supply. Waiver of PremiumThis is an option available to the applicant for life insurance which sets certain conditions under which an insurance policy will be kept in full force by the insurance company without the payment of premiums. Very specifically, a life insured would have to become totally disabled through injury or illness for a period of six months before the benefit kicks in. When it does, the insurance company retroactively pays premiums from the beginning of the disability until the time the insured is able to perform some form of regular activity. 'Totally disabled' is highlited here, because that is what is required to receive this benefit. Watch listA list of securities selected for special surveillance by a brokerage, exchange or regulatory Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |