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Definition of Asset-Based Financing
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
Methods of financing in which lenders and equity investors look principally to the
A merger or consolidation in which an acquirer purchases the selling firm's assets.
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
A 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.
A relatively new method advocated for the
a process using multiple cost drivers to predict and allocate costs to products and services;
A cost allocation system that compiles costs and assigns
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
Any possession that has value in an exchange.
A resource, recorded through a transaction, that is expected to yield a benefit to a
Something that is owned; a financial claim or a piece of property that is a store of value.
Probable future economic benefit that is obtained or controlled by an entity as a result of
Anything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.).
All things of value owned by an individual or organization.
Ratios that measure how effectively the firm is managing its assets.
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Bond or note secured by assets of company.
A security that is collateralized by loans, leases, receivables, or installment contracts
Categories of assets, such as stocks, bonds, real estate and foreign securities.
Extent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The ratio of total assets to stockholder equity.
Asset for asset swap
Creditors exchange the debt of one defaulting borrower for the debt of another
Also called surplus management, the task of managing funds of a financial
The weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments.
Asset pricing model
A model for determining the required rate of return on an asset.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
The amount of total risk that can be eliminated by diversification by
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
asset turnover ratio
A broad-gauge ratio computed by dividing annual
A firm's productive resources.
Anything of value that a company owns.
Things that the business owns.
Items owned by the company or expenses that have been paid for but have not been used up.
A common element of a financial plan that describes projected capital spending and the
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
An intercompany loan channeled through a bank.
Interim financing of one sort or another used to solidify a position until more permanent
an asset used to generate revenues or cost savings
A fixed asset, something that is expected to have long-term usage within
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
Cash Flow Provided or Used from Financing Activities
Cash receipts and payments involving
CASH FLOWS FROM FINANCING ACTIVITIES
A section on the cash-flow statement that shows how much cash a company raised by selling stocks or bonds this year and how much was paid out for cash dividends and other finance-related obligations.
An offset to an asset account that reduces the balance of the asset account.
Cost of lease financing
A lease's internal rate of return.
Typically the cash, accounts receivable, and inventory accounts on the
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Current refers to cash and those assets that will be turned
Cash and other company assets that can be readily turned into cash within one year.
Raising loan capital through the creation of debt by issuing a form of paper evidencing amounts owed and payable on specified dates or on demand.
New debt obtained by a firm during the Chapter 11 bankruptcy process.
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Dynamic asset allocation
An asset allocation strategy in which the asset mix is mechanistically shifted in
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
A range of financing products (loans. guarantees, letters of credit, insurance etc.) in support of a variety of activities which help Canadian firms expand into new export markets.
Federal Financing Bank
A federal institution that lends to a wide array of federal credit agencies funds it
Claims on real assets.
Claims to the income generated by real assets. Also called securities.
One of the three classes of cash flows reported in the
a judgment made regarding the method
Decision as to how to raise the money to pay for investments in real assets.
Decisions concerning the liabilities and stockholders' equity side of the firm's balance
This is a generic term that refers to the many different forms of financing a business may use. For example - loans, shares, and bonds are all considered financing instruments.
Long-lived property owned by a firm that is used by a firm in the production of its income.
An item with a longevity greater than one year, and which exceeds a company’s
Fixed asset turnover ratio
The ratio of sales to fixed assets.
Things that the business owns and are part of the business infrastructure – fixed assets may be
An informal term that refers to the variety of long-term operating
Land, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation.
Fixed Assets Turnover Ratio
A measure of the utilization of a company's fixed assets to
A legal claim to some future benefit, typically a claim to future cash. Goodwill, intellectual
A nonphysical asset with a life greater than one year. Examples are
assets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises.
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.
Value of property, equipment and other capital assets minus the depreciation. This is an
Longer-Term Fixed Assets
assets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied.
Multi-option financing facility
A syndicated confirmed credit line with attached options.
net asset value
The value of all the holdings of a mutual fund, less the fund's liabilities.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
financing that is not shown as a liability in a company's balance sheet.
A cluster of accounts that are listed after fixed assets on the balance sheet,
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
assets, the title of which are held personally rather than in the name of some other legal entity.
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