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Financial Terms | |
American Depositary Receipts (ADRs) |
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Definition of American Depositary Receipts (ADRs)American Depositary Receipts (ADRs)Certificates issued by a U.S. depositary bank, representing foreign
Related Terms:American optionAn option that may be exercised at any time up to and including the expiration date. American optionAn option that can be exercised any time until its American sharesSecurities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades American-style optionAn option contract that can be exercised at any time between the date of purchase and Cash receipts journalA journal used to record the transactions that result in a debit to cash. North American Free Trade Agreement (NAFTA)an agreement among Canada, Mexico, and the United States establishing the North american Free Trade Zone, with a resulting reduction in trade barriers ![]() "Soft" Capital RationingCapital rationing that under certain circumstances can be violated or even viewed Abandonment optionThe option of terminating an investment earlier than originally planned. ABM (automated banking machine)A bank machine, sometimes referred to as an automated teller machine (ATM). Acceleration ClauseClause causing repayment of a debt, if specified events occur or are not met. Accelerationist HypothesisBelief that an effort to keep unemployment below its natural rate results in an accelerating inflation. accounts receivable turnover ratioA ratio computed by dividing annual Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' Acid-test ratioAlso called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid ACID-TEST RATIOA ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula: ![]() Acid-test RatioSee quick ratio acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable Act of state doctrineThis doctrine says that a nation is sovereign within its own borders and its domestic Adjusted Cash Flow Provided by Continuing OperationsCash flow provided by operating Adjusted EarningsNet income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss. Adjusted EBITDAConventional earnings before interest, taxes, depreciation, and amortization (EBITDA) revised to exclude the effects of mainly nonrecurring items of revenue or gain and expense or loss. Adjusted Income from ContinuingOperations Reported income from continuing operations Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity Agency bankA form of organization commonly used by foreign banks to enter the U.S. market. An agency Aggregate SupplyTotal quantity of goods and services supplied. Aggregate Supply CurveCombinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not. ![]() All or noneRequirement that none of an order be executed unless all of it can be executed at the specified price. All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Allowance for doubtful accountsA contra account related to accounts receivable that represents the amounts that the company expects will not be collected. Allowance for Doubtful AccountsAn estimate of the uncollectible portion of accounts receivable American sharesSecurities Certificates issued in the U.S. by a transfer agent acting on behalf of the foreign American Stock Exchange (AMEX)The second-largest stock exchange in the United States. It trades American-style optionAn option contract that can be exercised at any time between the date of purchase and Announcement datedate on which particular news concerning a given company is announced to the public. Appraisal ratioThe signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard ArbitrageThe simultaneous buying and selling of a security at two different prices in two different markets, ArbitrageThe purchase of securities on one market for immediate resale on ArbitrageTransactions designed to make a sure profit from inconsistent prices. Arbitrage-free option-pricing modelsYield curve option-pricing models. Arbitrage Pricing Theory (APT)An alternative model to the capital asset pricing model developed by ArbitrageursPeople who search for and exploit arbitrage opportunities. Articles of incorporationLegal document establishing a corporation and its structure and purpose. Asian currency units (ACUs)dollar deposits held in Singapore or other Asian centers. Asian optionoption based on the average price of the asset during the life of the option. Asset activity ratiosratios that measure how effectively the firm is managing its assets. Asset/equity ratioThe ratio of total assets to stockholder equity. asset turnover ratioA broad-gauge ratio computed by dividing annual Asymmetric informationinformation that is known to some people but not to other people. At-the-moneyAn option is at-the-money if the strike price of the option is equal to the market price of the authorized share capitalMaximum number of shares that the company is permitted to issue, as specified in the firm’s articles of incorporation. Authorized sharesNumber of shares authorized for issuance by a firm's corporate charter. Authorized sharesThe number of shares of stock that the company is legally authorized to sell. Back-up1) When bond yields and prices fall, the market is said to back-up. BAN (Bank anticipation notes)Notes issued by states and municipalities to obtain interim financing for BankMoney in a bank cheque account, the difference between receipts and payments. Bank collection floatThe time that elapses between when a check is deposited into a bank account and when the funds are available to the depositor, during which period the bank is collecting payment from the payer's bank. Bank discount basisA convention used for quoting bids and offers for treasury bills in terms of annualized Bank draftA draft addressed to a bank. bank draftA guaranteed form of payment which is issued in amounts over $5,000. Bank for International Settlements (BIS)An international bank headquartered in Basel, Switzerland, which Bank lineLine of credit granted by a bank to a customer. Bank overdraftMoney owed to the bank in a cheque account where payments exceed receipts. Bank reconciliationThe process of taking the balances from the bank statement and the general ledger and making adjustments so that they agree. Bank reconciliationA comparison between the cash position recorded on a company’s Bank wireA computer message system linking major banks. It is used not for effecting payments, but as a Banker's acceptanceA short-term credit investment created by a non-financial firm and guaranteed by a Bankers AcceptancesA bill of exchange, or draft, drawn by the borrower for payment on a specified date, and accepted by a chartered bank. upon acceptance, the bill becomes, in effect, a postdated certified cheque. BankruptcyState of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from bankruptcyThe reorganization or liquidation of a firm that cannot pay its debts. Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk. Bankruptcy viewThe argument that expected bankruptcy costs preclude firms from being financed entirely Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market BARRA's performance analysis (PERFAN)A method developed by BARRA, a consulting firm in Barrier optionsContracts with trigger points that, when crossed, automatically generate buying or selling of basic earnings per share (EPS)This important ratio equals the net Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Basket optionsPackages that involve the exchange of more than two currencies against a base currency at Bellwether issuesRelated:Benchmark issues. Benchmark issuesAlso called on-the-run or current coupon issues or bellwether issues. In the secondary Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off Binomial option pricing modelAn option pricing model in which the underlying asset can take on only two Black-Scholes option-pricing modelA model for pricing call options based on arbitrage arguments that uses Blocked currencyA currency that is not freely convertible to other currencies due to exchange controls. Blue-chip companyLarge and creditworthy company. book value and book value per shareGenerally speaking, these terms Book value per shareThe ratio of stockholder equity to the average number of common shares. Book value Book Value per ShareThe book value of a company divided by the number of shares Bottom-up equity management styleA management style that de-emphasizes the significance of economic BranchAn operation in a foreign country incorporated in the home country. Break-even timeRelated: Premium payback period. Builder buydown loanA mortgage loan on newly developed property that the builder subsidizes during the Bulldog bondforeign bond issue made in London. Bulldog marketThe foreign market in the United Kingdom. BuydownsMortgages in which monthly payments consist of principal and interest, with portions of these cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits Call an optionTo exercise a call option. Call dateA date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |