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Financial Terms | |
Benefit Wage Ratio Method |
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Definition of Benefit Wage Ratio MethodBenefit Wage Ratio MethodThe proportion of total taxable wages for laid off
Related Terms:"Soft" Capital RationingCapital rationing that under certain circumstances can be violated or even viewed Acceleration ClauseClause causing repayment of a debt, if specified events occur or are not met. Accelerationist HypothesisBelief that an effort to keep unemployment below its natural rate results in an accelerating inflation. Accidental Death Benefit (ADB)Coverage against accidental death usually payable in addition to base amount of coverage. accounts receivable turnover ratioA ratio computed by dividing annual Accumulated Benefit Obligation (ABO)An approximate measure of the liability of a plan in the event of a 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 RatioSee quick ratio acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable Adjusted Cash Flow Provided by Continuing OperationsCash flow provided by operating algebraic methoda process of service department cost allocation Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. Appraisal ratioThe signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard Articles of incorporationLegal document establishing a corporation and its structure and purpose. Asset activity ratiosratios that measure how effectively the firm is managing its assets. ![]() Asset/equity ratioThe ratio of total assets to stockholder equity. asset turnover ratioA broad-gauge ratio computed by dividing annual Automatic Benefits PaymentAutomatic payment of moneys derived from a benefit. Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how BenefitAn instruction that pays a cash amount upon the occurrence of a specific event. Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit ValueThe amount of cash payable on a benefit. benefits-provided rankinga listing of service departments in an order that begins with the one providing the most service Bootstrapping, bootstrap methodAn arithmetic method for backing an cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Capital rationingPlacing one or more limits on the amount of new investment undertaken by a firm, either capital rationinga condition that exists when there is an capital rationingLimit set on the amount of funds available for investment. Capitalization methodA method of constructing a replicating portfolio in which the manager purchases a Capitalization ratiosAlso called financial leverage ratios, these ratios compare debt to total capitalization Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash flow from operationsA firm's net cash inflow resulting directly from its regular operations Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations CASH FLOWS FROM OPERATIONSA section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business. Cash ratioThe proportion of a firm's assets held as cash. Cash Ratioratio of cash and cash equivalents to liabilities; in the case of a bank, the ratio of cash to total deposit liabilities. Common stock ratiosratios that are designed to measure the relative claims of stockholders to earnings Completed-Contract MethodA contract accounting method that recognizes contract revenue Concentration accountA single centralized account into which funds collected at regional locations concentration bankingSystem whereby customers make payments to a regional collection center which transfers funds to Concentration servicesMovement of cash from different lockbox locations into a single concentration Configuration auditA review of all engineering documentation used as the basis Configuration controlVerifying that a delivered product matches authorizing contribution margin ratiothe proportion of each revenue dollar remaining after variable costs have been covered; Controlled foreign corporation (CFC)A foreign corporation whose voting stock is more than 50% owned Conversion ratioThe number of shares of common stock that the security holder will receive from CorporationA legal "person" that is separate and distinct from its owners. A corporation is allowed to own CorporationA legal entity, organized under state laws, whose investors purchase corporationBusiness owned by stockholders who are not personally Cost-Benefit AnalysisThe calculation and comparison of the costs and benefits of a policy or project. cost-benefit analysis the analytical process of comparing therelative costs and benefits that result from a specific course Cost-benefit ratioThe net present value of an investment divided by the investment's initial cost. Also called Coverage ratiosratios used to test the adequacy of cash flows generated through earnings for purposes of Credit RationingRestriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans. Current rate methodUnder this currency translation method, all foreign currency balance-sheet and income Current ratioIndicator of short-term debt paying ability. Determined by dividing current assets by current Current ratioA ratio that shows how many times a company could pay its current debts if it used its current assets to pay them. The formula: current ratioCalculated to assess the short-term solvency, or debt-paying Current RatioA measure of the ability of a company to use its current assets to Current RatioCurrent assets divided by current liabilities. This ratio indicates the extent to which the claims of short-term creditors are covered by assets expected to be converted to cash in the near future. Customary payout ratiosA range of payout ratios that is typical based on an analysis of comparable firms. Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Death BenefitAmount paid on death of an insured. Debt/equity ratioIndicator of financial leverage. Compares assets provided by creditors to assets provided Debt/Equity RatioA comparison of debt to equity in a company's capital structure. Debt ratioTotal debt divided by total assets. Debt RatioThe percentage of debt that is used in the total capitalization of a Debt-service coverage ratioEarnings before interest and income taxes plus one-third rental charges, divided debt-to-equity ratioA widely used financial statement ratio to assess the Declaration dateThe date on which a firm's directors meet and announce the date and amount of the next Declaration dateThe date on which the board of directors has declared a dividend. Defined benefit planA pension plan in which the sponsor agrees to make specified dollar payments to Defined Benefit PlanA pension plan that pays out a predetermined dollar Direct estimate methodA method of cash budgeting based on detailed estimates of cash receipts and cash Direct methodA method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows. direct methoda service department cost allocation approach Direct-Method FormatA format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities. Direct write-off methodA method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers. Discontinued operationA business segment that has been or is planned to be closed or sold off. Discontinued OperationsNet income and the gain or loss on disposal of a business segment whose assets and operations are clearly distinguishable from the other assets and operations of an entity. dividend growth methoda method of computing the cost Dividend payout ratioPercentage of earnings paid out as dividends. dividend payout ratioComputed by dividing cash dividends for the year dividend payout ratioPercentage of earnings paid out as dividends. dividend yield ratioCash dividends paid by a business over the most Dollar durationThe product of modified duration and the initial price. Domestic International Sales Corporation (DISC)A U.S. corporation that receives a tax incentive for DurationA common gauge of the price sensitivity of an asset or portfolio to a change in interest rates. DurationThe weighted average of the time until maturity of each of the DurationThe expected life of a fixed-income security considering its coupon DurationThe time it takes for a policy or annuity to reach maturity. Earnings retention ratioPlowback rate. economic integrationthe creation of multi-country markets Edge corporationsSpecialized banking institutions, authorized and chartered by the Federal Reserve Board Effective durationThe duration calculated using the approximate duration formula for a bond with an Efficiency Wagewage that maximizes profits. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |