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Definition of Big Bang
The term applied to the liberalization in 1986 of the London Stock Exchange in which trading was
A street-smart term that refers to the practice by many businesses
A wholesale write-down of assets and accrual of liabilities in an effort to make the
A nickname for the New York Stock Exchange. Also known as The Exchange. More than 2,000
Capital rationing that under certain circumstances can be violated or even viewed
A bank machine, sometimes referred to as an automated teller machine (ATM).
The ability to produce a good or service with fewer resources than competitors. See also comparative advantage.
Rule in bankruptcy proceedings whereby senior creditors are required to be paid in full
Goods may be returned to the seller by the purchaser without restrictions.
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
a cost accumulation and reporting
A methodology under which all manufacturing costs are assigned
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
A characterization used by the Securities and Exchange
Schedule of depreciation rates allowed for tax purposes.
Clause causing repayment of a debt, if specified events occur or are not met.
A collection of systems and processes used to record, report and interpret business transactions.
A broad, all-inclusive term that refers to the methods and procedures
Accounting and Auditing Enforcement Release (AAER)
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
An alteration in the accounting methodology or estimates used in
earnings of a firm as reported on its income statement.
A business for which a separate set of accounting records is being
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The formula assets = liabilities + Equity.
An equation that reflects the two-sided nature of a
Unintentional mistakes in financial statements. Accounted for by restating
The change in the value of a firm's foreign currency denominated accounts due to a
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
Intentional misstatements or omissions of amounts or disclosures in
The ease and quickness with which assets can be converted to cash.
The period of time for which financial statements are produced – see also financial year.
The principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements.
Accounting rate of return (ARR)
A method of investment appraisal that measures
accounting rate of return (ARR)
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
A method of accounting in which you record expenses when you incur them and sales as you make them—not when you pay bills or receive checks in the mail.
An expense for profit purposes even though no payment has been made.
The recording of revenue when earned and expenses when
Well, frankly, accrual is not a good descriptive
A bond on which interest accrues, but is not paid to the investor during the time of accrual.
A method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred.
Accrued expenses payable
expenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services.
accrued expenses payable
The account that records the short-term, noninterest-
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
acid test ratio (also called the quick ratio)
The sum of cash, accounts receivable, and short-term marketable
Acquisition of assets
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Acquisition of stock
A merger or consolidation in which an acquirer purchases the acquiree's Stock.
Adjustable rate preferred stock (ARPS)
Publicly traded issues that may be collateralized by mortgages and MBSs.
Net income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss.
Total quantity of goods and services supplied.
Aggregate Supply Curve
Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.
A forceful and intentional choice and application of accounting principles
American Stock Exchange (AMEX)
The second-largest Stock Exchange in the United States. It trades
Annual fund operating expenses
For investment companies, the management fee and "other expenses,"
the amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for this amount are to an overhead account
Any possession that has value in an Exchange.
A resource, recorded through a transaction, that is expected to yield a benefit to a
something that is owned; a financial claim or a piece of property that is a store of value.
Probable future economic benefit that is obtained or controlled by an entity as a result of
Anything owned by, or owed to, an individual or business which has commercial or Exchange value (e.g., cash, property, etc.).
All things of value owned by an individual or organization.
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Bond or note secured by assets of company.
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
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
Categories of assets, such as Stocks, bonds, real estate and foreign securities.
Extent to which a company's net assets cover a particular debt obligation, class of preferred Stock, or equity position.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The ratio of total assets to Stockholder equity.
Asset for asset swap
Creditors Exchange the debt of one defaulting borrower for the debt of another
Also called surplus management, the task of managing funds of a financial
The weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments.
Asset pricing model
A model for determining the required rate of return on an asset.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
The amount of total risk that can be eliminated by diversification by
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises when the Stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
asset turnover ratio
A broad-gauge ratio computed by dividing annual
A firm's productive resources.
Anything of value that a company owns.
Things that the business owns.
Items owned by the company or expenses that have been paid for but have not been used up.
A common element of a financial plan that describes projected capital spending and the
Auction rate preferred stock (ARPS)
Floating rate preferred Stock, the dividend on which is adjusted every
Automated Clearing House (ACH)
A collection of 32 regional electronic interbank networks used to
Automated Clearing House (ACH)
A banking clearinghouse that processes direct
Automated storage/retrieval system
A racking system using automated systems
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Also referred to as the weighted-average life (WAL). The average number of years that each
Average Propensity to Consume
Ratio of consumption to disposable income. See also marginal propensity to consume.
A trade, quote, or market that does not originate with the dealer in question, e.g., "the bid is 98-10
1) When bond yields and prices fall, the market is said to back-up.
Balance of Merchandise Trade
The difference between exports and imports of goods.
Balance of payments
A statistical compilation formulated by a sovereign nation of all economic transactions
Balance of Payments
The difference between the demand for and supply of a country's currency on the foreign Exchange market.
Balance of Payments Accounts
A statement of a country's transactions with other countries.
Balance of trade
Net flow of goods (exports minus imports) between countries.
Balance of Trade
See balance of merchandise trade.
Also called the statement of financial condition, it is a summary of the assets, liabilities, and
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