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Financial Terms | |
Available-for-Sale Security |
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Definition of Available-for-Sale SecurityAvailable-for-Sale SecurityA debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
Related Terms:Asset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Best-efforts saleA method of securities distribution/ underwriting in which the securities firm agrees to sell Closing saleA transaction in which the seller's intention is to reduce or eliminate a long position in a stock, Conditional SaleA type of agreement to sell whereby a seller retains title to goods sold and delivered to a purchaser until full payment has been made. Conditional Sale AgreementAn agreement entered into between a conditional buyer and a conditional seller setting out the terms under which goods change hands. Conditional sales contractsSimilar to equipment trust certificates except that the lender is either the Contingent deferred sales charge (CDSC)The formal name for the load of a back-end load fund. ![]() Convertible securityA security that can be converted into common stock at the option of the security holder, Cost of salesThe manufacture or purchase price of goods sold in a period or the cost of providing a service. Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Days' sales outstandingAverage collection period. Debt SecurityA security representing a debt relationship with an enterprise, including a government Derivative securityA financial security, such as an option, or future, whose value is derived in part from the Domestic International Sales Corporation (DISC)A U.S. corporation that receives a tax incentive for Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Equity SecurityAn ownership interest in an enterprise, including preferred and common stock. ![]() Exchangeable Securitysecurity that grants the security holder the right to exchange the security for the Fixed-dollar securityA nonnegotiable debt security that can be redeemed at some fixed price or according to Fixed-income securityA security that pays a specified cash flow over a floating-rate securitysecurity paying dividends or interest that vary with short-term interest rates. Foreign Sales Corporation (FSC)A special type of corporation created by the Tax Reform Act of 1984 that Forward saleA method for hedging price risk which involves an agreement between a lender and an investor Gain-on-Sale AccountingUp-front gain recognized from the securitization and sale of a pool Gross salesThe total sales recorded prior to sales discounts and returns. Held-to-Maturity SecurityA debt security for which the investing entity has both the positive Host securityThe security to which a warrant is attached. Hybrid securityA convertible security whose optioned common stock is trading in a middle range, causing Installment saleThe sale of an asset in exchange for a specified series of payments (the installments). Limitation on merger, consolidation, or saleA bond covenant that restricts in some way a firm's ability to Limitation on sale-and-leasebackA bond covenant that restricts in some way a firm's ability to enter into Marketable securityAn easily traded investment, such as treasury bills, which is Monthly income preferred security (MIP)Preferred stock issued by a subsidiary located in a tax haven. Mortgage pass-through securityAlso called a passthrough, a security created when one or more mortgage Negotiated saleSituation in which the terms of an offering are determined by negotiation between the issuer Net salesTotal revenue, less the cost of sales returns, allowances, and discounts. NET SALES (revenue)The amount sold after customers’ returns, sales discounts, and other allowances are taken away from Nonmarketable SecurityA debt or equity security for which there is no posted price or bidand- NUMBER OF DAYS SALES IN RECEIVABLES(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that haven’t been collected yet. Opening saleA transaction in which the seller's intention is to create or increase a short position in a given percentage of sales modelsPlanning model in which sales forecasts are the driving variables and most other variables are point of sale (POS)The terminal at which a customer uses his/her debit card to make a direct payment transaction. See also Interac Direct Payment. Price/sales ratio (PS Ratio)Determined by dividing current stock price by revenue per share (adjusted for stock splits). Primitive securityAn instrument such as a stock or bond for which payments depend only on the financial Projected available balanceThe future planned balance of an inventory item, Purchase and saleA method of securities distribution in which the securities firm purchases the securities RATIO OF NET INCOME TO NET SALESA ratio that shows how much net income (profit) a company made on each dollar of net sales. Here’s the formula: RATIO OF NET SALES TO NET INCOMEA ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way: return on salesThis ratio equals net income divided by sales revenue. Sale and lease-backsale of an existing asset to a financial institution that then leases it back to the user. Sale and LeasebackAn agreement in which the owner of a property sells that property to a person or institution and then leases it back again for an agreed period and rental. SalesAmounts earned by the company from the sale of merchandise or services; often used interchangeably with the term revenue. Sales allowanceA reduction in a price that is allowed by the seller, due to a problem Sales chargeThe fee charged by a mutual fund when purchasing shares, usually payable as a commission to Sales discountA reduction in the price of a product or service that is offered by the Sales discountsA contra account that offsets revenue. It represents the amount of the discounts for early payment allowed on sales. Sales forecastA key input to a firm's financial planning process. External sales forecasts are based on Sales journalA journal used to record the transactions that result in a credit to sales. Sales mixThe mix of product/services offered by the business, each of which may be aimed at different customers, with each product/service having different prices and costs. sales mixthe relative combination of quantities of sales of the various products that make up the total sales of a company Sales returnsA contra account that offsets revenue. It represents the amount of sales made that were later returned. Sales Revenue Revenue recognized from the sales of products as opposed to the provision ofservices. Sales TaxA tax levied as a percentage of retail sales. Sales-type leaseAn arrangement whereby a firm leases its own equipment, such as IBM leasing its own Sales-type LeaseLease accounting used by a manufacturer who is also a lessor. Up-front gross Sales value at split-offA cost allocation methodology that allocates joint costs to joint sales value at split-off allocationa method of assigning joint cost to joint products that uses the relative sales values of the products at the split-off point as the proration basis; use of this method requires that all joint products SecurityPiece of paper that proves ownership of stocks, bonds and other investments. SecurityEither the collateral on a loan, or some type of equity ownership or debt, such SecurityA share or an interest in a property or an enterprise such as a stock certificate or a bond. SecurityCollateral offered by a borrower to a lender to secure a loan. Security characteristic lineA plot of the excess return on a security over the risk-free rate as a function of Security deposit (initial)Synonymous with the term margin. A cash amount of funds that must be deposited Security deposit (maintenance)Related: Maintenance margin security market line (SML). A description of Security market lineLine representing the relationship between expected return and market risk. Security Market LineA graph illustrating the equilibrium relationship between the security market lineRelationship between expected return and beta. Security selection decisionChoosing the particular securities to include in a portfolio. Security ValueThe monetary value placed on security by a lender in determining the extent to which it can make loans against such security. Short saleSelling a security that the seller does not own but is committed to repurchasing eventually. It is Short sale, short positionThe sale of a security or financial instrument not Social Security Act of 1935A federal Act establishing Old Age and Survivor’s Substitute saleA method for hedging price risk that utilizes debt-market instruments, such as interest rate Swap saleAlso called a swap assignment, a transaction that ends one counterparty's role in an interest rate Terms of saleConditions on which a firm proposes to sell its goods services for cash or credit. terms of saleCredit, discount, and payment terms offered on a sale. Trading SecurityA debt or equity security bought and held for sale in the near term to generate income on short-term price changes. Underlying securityOptions: the security subject to being purchased or sold upon exercise of an option Variable price securityA security, such as stocks or bonds, that sells at a fluctuating, market-determined price. Wholesale mortgage bankingThe purchasing of loans originated by others, with the servicing rights InventoryFor companies: Raw materials, items available for sale or in the process of being made ready for Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |