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Financial Terms | |
Average age of accounts receivable |
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Definition of Average age of accounts receivableAverage age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices.
Related Terms:Absolute AdvantageThe ability to produce a good or service with fewer resources than competitors. See also comparative advantage. Abusive Earnings ManagementThe use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result. Abusive Earnings ManagementA characterization used by the Securities and Exchange Accounts‘Buckets’ within the ledger, part of the accounting system. Each account contains similar transactions (line items) that are used for the production of financial statements. Or commonly used as an abbreviation for financial statements. Accounts payableMoney owed to suppliers. ACCOUNTS PAYABLEAmounts a company owes to creditors. Accounts payableAmounts owed by the company for goods and services that have been received, but have not yet been paid for. Usually accounts payable involves the receipt of an invoice from the company providing the services or goods. ![]() accounts payableShort-term, non-interest-bearing liabilities of a business Accounts payableAcurrent liability on the balance sheet, representing short-term obligations Accounts PayableAmounts due to vendors for purchases on open account, that is, not evidenced Accounts Payable Days (A/P Days)The number of days it would take to pay the ending balance Accounts receivableMoney owed by customers. ACCOUNTS RECEIVABLEAmounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts. Accounts receivableAmounts owed to the company, generally for sales that it has made. accounts receivableShort-term, non-interest-bearing debts owed to a Accounts receivableA current asset on the balance sheet, representing short-term Accounts ReceivableAmounts due from customers for sales on open account, not evidenced Accounts ReceivableMoney owed to a business for merchandise or services sold on open account. Accounts Receivable Days (A/R Days)The number of days it would take to collect the ending Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how accounts receivable turnover ratioA ratio computed by dividing annual activity-based management (ABM)a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received AgenciesFederal agency securities. AgencyA grouping of sales producers according to region. Compare with Branch. Agency bankA form of organization commonly used by foreign banks to enter the U.S. market. An agency Agency basisA means of compensating the broker of a program trade solely on the basis of commission Agency cost viewThe argument that specifies that the various agency costs create a complex environment in Agency costsThe incremental costs of having an agent make decisions for a principal. Agency pass-throughsMortgage pass-through securities whose principal and interest payments are Agency problemConflicts of interest among stockholders, bondholders, and managers. agency problemsConflicts of interest between the firm’s owners and managers. Agency theoryThe analysis of principal-agent relationships, wherein one person, an agent, acts on behalf of AgentThe decision-maker in a principal-agent relationship. AgentOne who represents Canada Life when providing services to clients 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 Alternative mortgage instrumentsVariations of mortgage instruments such as adjustable-rate and variablerate Annual percentage rate (APR)The periodic rate times the number of periods in a year. For example, a 5% annual percentage rate (APR)Interest rate that is annualized using simple interest. Annual percentage yield (APY)The effective, or true, annual rate of return. The APY is the rate actually 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. Arithmetic average (mean) rate of returnArithmetic mean return. 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/liability managementAlso called surplus management, the task of managing funds of a financial Automated storage/retrieval systemA racking system using automated systems AverageAn arithmetic mean of selected stocks intended to represent the behavior of the market or some Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average (across-day) measuresAn estimation of price that uses the average or representative price of a Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Average Collection Periodaverage number of days necessary to receive cash for the sale of Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average cost of capitalA firm's required payout to the bondholders and to the stockholders expressed as a Average inventoryThe beginning inventory for a period, plus the amount at the end of Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each Average maturityThe average time to maturity of securities held by a mutual fund. Changes in interest rates Average Propensity to ConsumeRatio of consumption to disposable income. See also marginal propensity to consume. Average Propensity to SaveRatio of saving to disposable income. See also marginal propensity to save. Average rate of return (ARR)The ratio of the average cash inflow to the amount invested. Average tax rateTaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Balance of Payments AccountsA statement of a country's transactions with other countries. Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off Bottom-up equity management styleA management style that de-emphasizes the significance of economic Canadian agenciesagency banks established by Canadian banks in the U.S. Captive AgentA licensed insurance agent who sells insurance for only one company. Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash management billVery short maturity bills that the Treasury occasionally sells because its cash Certified Management Accountant (CMA)a professional designation in the area of management accounting that Chart of accountsA listing of all accounts used in the general ledger, usually sorted in Closed-end mortgageMortgage against which no additional debt may be issued. Collateralized mortgage obligation (CMO)A security backed by a pool of pass-throughs , structured so that Commercial MortgageA loan made on real estate collateral, other than a residential property, in which a mortgage is given to secure payment of principal and interest. Comparative AdvantageA country has a comparative advantage over another country in the production of good A if to produce a unit of A it forgoes more of the production of good B than would the other country when it produces a unit of good A. Its efficiency in the production of good A relative to its efficiency in the production of good B is greater than is the case for the other country. See also absolute advantage. Competitive AdvantageThe strategies, skills, knowledge, resources or competencies that differentiate a business from its competitors. Conventional mortgageA loan based on the credit of the borrower and on the collateral for the mortgage. Corporate financial managementThe application of financial principals within a corporation to create and cost management system (CMS)a set of formal methods Coverage ratiosRatios used to test the adequacy of cash flows generated through earnings for purposes of Covered interest arbitrageA portfolio manager invests dollars in an instrument denominated in a foreign Currency arbitrageTaking advantage of divergences in exchange rates in different money markets by Days in receivablesaverage collection period. Debt leverageThe amplification of the return earned on equity when an investment or firm is financed Debt-service coverage ratioEarnings before interest and income taxes plus one-third rental charges, divided degree of operating leveragea factor that indicates how a percentage change in sales, from the existing or current degree of operating leverage (DOL)Percentage change in profits given a 1 percent change in sales. Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. Discounting of Accounts ReceivableShort-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable. Discouraged WorkerAn unemployed person who gives up looking for work and so is no longer counted as in the labor force. Dow Jones industrial averageThis is the best known U.S.index of stocks. It contains 30 stocks that trade on Dow Jones Industrial AverageIndex of the investment performance of a portfolio of 30 “blue-chip” stocks. Earnings ManagementThe active manipulation of earnings toward a predetermined target. Efficiency WageWage that maximizes profits. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |