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Financial Terms | |
Assets |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
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Definition of AssetsAssetsA firm's productive resources. ASSETSAnything of value that a company owns. AssetsItems owned by the company or expenses that have been paid for but have not been used up. AssetsThings that the business owns.
Related Terms:Acquisition of assetsA merger or consolidation in which an acquirer purchases the selling firm's assets. Assets requirementsA common element of a financial plan that describes projected capital spending and the Current assetsValue of cash, accounts receivable, inventories, marketable securities and other assets that Current assetsCash, things that will be converted into cash within a year (such as accounts receivable), and inventory. ![]() Current assetsAmounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments. current assetsCurrent refers to cash and those assets that will be turned Current AssetsCash and other company assets that can be readily turned into cash within one year. Exchange of assetsAcquisition of another company by purchase of its assets in exchange for cash or stock. Financial assetsClaims on real assets. financial assetsClaims to the income generated by real assets. Also called securities. Fixed assetsThings that the business owns and are part of the business infrastructure – fixed assets may be fixed assetsAn informal term that refers to the variety of long-term operating Fixed AssetsLand, 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 RatioA measure of the utilization of a company's fixed assets to Intangible assetsassets 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 assetsNon-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks). Long-term assetsValue of property, equipment and other capital assets minus the depreciation. This is an Longer-Term Fixed Assetsassets 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. Net assetsThe difference between total assets on the one hand and current liabilities and noncapitalized longterm Non-reproducible assetsA tangible asset with unique physical properties, like a parcel of land, a mine, or a Other assetsA cluster of accounts that are listed after fixed assets on the balance sheet, Other current assetsValue of non-cash assets, including prepaid expenses and accounts receivable, due Personal Assetsassets, the title of which are held personally rather than in the name of some other legal entity. Preferred Stock Stock that has a claim on assets and dividends of a corporation that are priorto that of common stock. Preferred stock typically does not carry the right to vote. Publicly traded assetsassets that can be traded in a public market, such as the stock market. Quick assetsCurrent assets minus inventories. RATE OF RETURN ON TOTAL ASSETSThe percentage return or profit that management made on each dollar of assets. The formula is: Real assetsIdentifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a real assetsassets used to produce goods and services. Realizable Revenue A revenue transaction where assets received in exchange for goods andservices are readily convertible into known amounts of cash or claims to cash. Reproducible assetsA tangible asset with physical properties that can be reproduced, such as a building or Residual assetsassets 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 assets (ROA)Although there is no single uniform practice for Return on total assetsThe ratio of earnings available to common stockholders to total assets. Return on Total Assets RatioA measure of the percentage return earned on the value of the Tangible fixed assetsPhysical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc. Total Debt to Total Assets RatioSee debt ratio 12B-1 feesThe percent of a mutual fund's assets used to defray marketing and distribution expenses. The 12b-1 fundsMutual funds that do not charge an upfront or back-end commission, but instead take out up to Accounting equationThe representation of the double-entry system of accounting such that assets are equal to liabilities plus capital. Accounting equationThe formula assets = Liabilities + Equity. accounting equationAn equation that reflects the two-sided nature of a Accounting insolvencyTotal liabilities exceed total assets. A firm with a negative net worth is insolvent on Accounting liquidityThe ease and quickness with which assets can be converted to cash. accrual-basis accountingWell, frankly, accrual is not a good descriptive accumulated depreciationA contra, or offset, account that is coupled 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 ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable acquisitionTakeover of a firm by purchase of that firm’s common Aggressive Capitalization PoliciesCapitalizing and reporting as assets significant portions of Aggressive Cost CapitalizationCost capitalization that stretches the flexibility within generally AmortizationSee depreciation, but usually in relation to assets attached to leased property. AmortizationReduction in value of an asset over some period for accounting Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the Asset-Backed SecuritiesBond or note secured by assets of company. Asset-based financingMethods of financing in which lenders and equity investors look principally to the Asset classesCategories of assets, such as stocks, bonds, real estate and foreign securities. Asset CoverageExtent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position. Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset/equity ratioThe ratio of total assets to stockholder equity. Asset/liability managementAlso called surplus management, the task of managing funds of a financial asset mixThe weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments. Asset substitutionA firm's investing in assets that are riskier than those that the debtholders expected. Asset substitution problemArises when the stockholders substitute riskier assets for the firm's existing Asset swapAn interest rate swap used to alter the cash flow characteristics of an institution's assets so as to Asset turnoverThe ratio of net sales to total assets. asset turnovera ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets asset turnover ratioA broad-gauge ratio computed by dividing annual Attribution RulesLegislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you. Balance sheetAlso called the statement of financial condition, it is a summary of the assets, liabilities, and BALANCE SHEETA “snapshot” statement that freezes a company on a particular day, like the last day of the year, and shows the balances in its asset, liability, and stockholders’ equity accounts. It’s governed by the formula: Balance SheetA financial statement showing the financial position of a business – its assets, liabilities and Balance SheetOne of the basic financial statements; it lists the assets, liabilities, and equity accounts of the company. The Balance Sheet is prepared using the balances at the end of a specific day. balance sheetA term often used instead of the more formal and correct Balance sheetA report that summarizes all assets, liabilities, and equity for a company balance sheetFinancial statement that shows the value of the Balance SheetA financial report showing the status of a company's assets, liabilities, and owners' equity on a given date. Balance sheet identityTotal assets = Total Liabilities + Total Stockholders' Equity BankruptcyState of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how BeneficiaryThis is the person who benefits from the terms of a trust, a will, an RRSP, a RRIF, a LIF, an annuity or a life insurance policy. In relation to RRSP's, RRIF's, LIF's, Annuities and of course life insurance, if the beneficiary is a spouse, parent, offspring or grand-child, they are considered to be a preferred beneficiary. If the insured has named a preferred beneficiary, the death benefit is invariably protected from creditors. There have been some court challenges of this right of protection but so far they have been unsuccessful. See "Creditor Protection" below. A beneficiary under the age of 18 must be represented by an individual guardian over the age of 18 or a public official who represents minors generally. A policy owner may, in the designation of a beneficiary, appoint someone to act as trustee for a minor. Death benefits are not subject to income taxes. If you make your beneficiary your estate, the death benefit will be included in your assets for probate. Probate filing fees are currently $14 per thousand of estate value in British Columbia and $15 per thousand of estate value in Ontario. big bathA street-smart term that refers to the practice by many businesses Big BathA wholesale write-down of assets and accrual of liabilities in an effort to make the Book profitThe cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT. Book ReturnsBook yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets. Book valueA company's book value is its total assets minus intangible assets and liabilities, such as debt. A book valueNet worth of the firm’s assets or liabilities according BOOK VALUE OF COMMON STOCKThe theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals: BrokerAn agent who handles public orders to buy or sell financial assets. Business Expansion InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. CapitalThe shareholders’ investment in the business; the difference between the assets and liabilities capitalA very broad term rooted in economic theory and referring to CapitalExpenditures Purchases of productive long-lived assets, in particular, items of property, Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |