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Definition of Asset swap
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
Creditors exchange the debt of one defaulting borrower for the debt of another
A merger or consolidation in which an acquirer purchases the selling firm's assets.
swap in which the principal or national amount rises (falls) as interest rates
Any possession that has value in an exchange.
The ratio of total assets to stockholder equity.
Also called surplus management, the task of managing funds of a financial
Ratios that measure how effectively the firm is managing its assets.
The decision regarding how an institution's funds should be distributed among the
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Categories of assets, such as stocks, bonds, real estate and foreign securities.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
A model for determining the required rate of return on an asset.
A firm's investing in assets that are riskier than those that the debtholders expected.
Arises when the stockholders substitute riskier assets for the firm's existing
The ratio of net sales to total assets.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
A firm's productive resources.
A common element of a financial plan that describes projected capital spending and the
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
A fixed rate currency swap against floating U.S. dollar LIBOR payments.
An agreement to swap a series of specified payment obligations denominated in one currency
Value of cash, accounts receivable, inventories, marketable securities and other assets that
A set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank
swap between two LIBO rates of interest, e.g. yen LIBOR for dollar LIBOR. Payments are
Dynamic asset allocation
An asset allocation strategy in which the asset mix is mechanistically shifted in
A swap in which the cash flows that are exchanged are based on the total return on some stock
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Extending maturity through a swap, e.g. selling a 2-year note and buying one with a slightly
Claims on real assets.
Long-lived property owned by a firm that is used by a firm in the production of its income.
Fixed asset turnover ratio
The ratio of sales to fixed assets.
Foreign exchange swap
An agreement to exchange stipulated amounts of one currency for another currency
A legal claim to some future benefit, typically a claim to future cash. Goodwill, intellectual
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
Intermarket spread swaps
An exchange of one bond for another based on the manager's projection of a
An interest rate swap used to alter the cash flow characteristics of an institution's liabilities so
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
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
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
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
Publicly traded assets
assets that can be traded in a public market, such as the stock market.
Pure yield pickup swap
Moving to higher yield bonds.
A financial tool in which the buyer has the right, or option, to enter into a swap as a floatingrate
See: differential swap.
Current assets minus inventories.
Rate anticipation swaps
An exchange of bonds in a portfolio for new bonds that will achieve the target
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a
A tangible asset with physical properties that can be reproduced, such as a building or
assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months
Return on total assets
The ratio of earnings available to common stockholders to total assets.
Riskless or risk-free asset
An asset whose future return is known today with certainty. The risk free asset is
An asset whose future return is uncertain.
An asset whose future return is known today with certainty.
A swap in which a money manager exchanges one bond for another bond that is similar in
An arrangement whereby two companies lend to each other on different terms, e.g. in different
Related: swap sale.
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
The difference between spot and forward rates expressed in points, e.g., $0.0001 per pound sterling.
An interest rate swap designed to end a counterparty's role in another interest rate swap,
Also called a swap assignment, a transaction that ends one counterparty's role in an interest rate
Options on interest rate swaps. The buyer of a swaption has the right to enter into an interest rate
Tactical Asset Allocation (TAA)
An asset allocation strategy that allows active departures from the normal
An asset whose value depends on particular physical properties. These i nclude reproducible
swapping two similar bonds to receive a tax benefit.
Total asset turnover
The ratio of net sales to total assets.
The asset that an option gives the option holder the right to buy or to sell.
An asset which has a limited life and thus, decreases in value (depreciates) over time. Also
Anything of value that a company owns.
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
RATE OF RETURN ON TOTAL ASSETS
The percentage return or profit that management made on each dollar of assets. The formula is:
Things that the business owns.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Things that the business owns and are part of the business infrastructure â€“ fixed assets may be
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
Tangible fixed assets
Physical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc.
Items owned by the company or expenses that have been paid for but have not been used up.
An offset to an asset account that reduces the balance of the asset account.
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.
asset turnover ratio
A broad-gauge ratio computed by dividing annual
Current refers to cash and those assets that will be turned
An informal term that refers to the variety of long-term operating
return on assets (ROA)
Although there is no single uniform practice for
The amount of total risk that can be eliminated by diversification by
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
Fixed Assets Turnover Ratio
A measure of the utilization of a company's fixed assets to
Return on Total Assets Ratio
A measure of the percentage return earned on the value of the
An exchange of cash flows between two counterparties. The
Total Asset Turnover Ratio
A measure of the utilization of all of a company's assets to
Total Debt to Total Assets Ratio
See debt ratio
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
an asset used to generate revenues or cost savings
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