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Definition of Book Income
Pretax income reported on the income statement.
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
Generally, book income as a proportion of net book value.
Future tax benefit that results from (1) the origination of a temporary difference
Future tax obligation that results from the origination of a temporary
The total tax provision divided by pretax book income from continuing
The expense deduction from pretax book income reported on the
A difference between pretax book income and taxable income that
A banker or trader's positions.
cash A firm's cash balance as reported in its financial statements. Also called ledger cash.
The managing underwriter for a new issue. The book runner maintains the book of securities sold.
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
The ratio of stockholder equity to the average number of common shares. book value
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the
Cash flow plus change in present value.
Also called a busted convertible, a convertible security that is trading like a straight
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
The market for trading bonds and preferred stock.
One who receives income from a trust.
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
A mutual fund providing for liberal current income from investments.
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
Common stock with a high dividend yield and few profitable investment opportunities.
The revenue from a portfolio of invested assets.
Limit order book
A record of unexecuted limit orders that is maintained by the specialist. These orders are
Market price of a share divided by book value per share.
A bank runs a matched book when the distribution of maturities of its assets and liabilities are equal.
Monthly income preferred security (MIP)
Preferred stock issued by a subsidiary located in a tax haven.
Net book value
The current book value of an asset or liability; that is, its original book value net of any
The company's total earnings, reflecting revenues adjusted for costs of doing business,
See: unmatched book.
Compares a stock's market value to the value of total assets less total liabilities (book
See: unmatched book.
Also called margin income, the difference between income and cost. For a depository
Set of books kept by firm management for its annual report that follows Financial
Set of books kept by a firm's management for the IRS that follows IRS rules. The stockholder's
Gross income less a set of deductions.
For an insurance company, the difference between the premiums earned and the costs
If the average maturity of a bank's liabilities is less than that of its assets, it is said to be
An assetâ€™s cost basis minus accumulated depreciation.
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a companyâ€™s assets were sold on the balance sheetâ€™s date. book value equals:
An accounting statement that summarizes information about a company in the following format:
What the business paid to the IRS.
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
RATIO OF NET INCOME TO NET SALES
A ratio that shows how much net income (profit) a company made on each dollar of net sales. Hereâ€™s the formula:
RATIO OF NET SALES TO NET INCOME
A ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way:
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
income that a company receives in the form of dividends on stock in other companies that it holds.
One of the basic financial statements; it lists the revenue and expense accounts of the company.
income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.
The last line of the income Statement; it represents the amount that the company earned during a specified period.
book value and book value per share
Generally speaking, these terms
earnings before interest and income tax (EBIT)
A measure of profit that
Financial statement that summarizes sales revenue
net income (also called the bottom line, earnings, net earnings, and net
The value of an asset as carried on the balance sheet of a
Book Value per Share
The book value of a company divided by the number of shares
Market to Book Ratio
Measure of the book value of a company on a per share basis. It is
a philosophy about increasing a firmâ€™s performance by involving all workers and by ensuring
the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center
current compensation that is taxed at a future date
current compensation that is never taxed
A security that pays a specified cash flow over a
The amount of money invested in inventory, as per a companyâ€™s
An assetâ€™s original cost, less any depreciation that has been subsequently incurred.
Net earnings after all expenses for an accounting period are subtracted from all
A financial report that summarizes a companyâ€™s revenue, cost of
A government tax on the income earned by an individual or corporation.
The excess of revenues over expenses, including the impact of income taxes.
The net income of a business, less the impact of any financial activity,
book rate of return
Accounting income divided by book value.
Net worth of the firmâ€™s assets or liabilities according
common-size income statement
income statement that presents items as a percentage of revenues.
Financial statement that shows the revenues, expenses, and net income of a firm over a period of time.
Also called economic value added. Profit minus cost of capital employed.
income less income tax.
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
GDP with some adjustments to remove items that do not make it into anyone's hands as income, such as indirect taxes and depreciation. Loosely speaking, it is interpreted as being equal to GDP.
National Income and Product Accounts
The national accounting system that records economic activity such as GDP and related measures.
Permanent Income Hypothesis
Theory that individuals base current consumption spending on their perceived long-run average income rather than their current income.
income expressed in base-year dollars, calculated by dividing nominal income by a price index.
Tax-Related Incomes Policy (TIP)
Tax incentives for labor and business to induce them to conform to wage/price guidelines.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
Adjusted Income from Continuing
Operations Reported income from continuing operations
Cash Flowâ€“toâ€“Income Ratio (CFI)
Adjusted cash flow provided by continuing operations
Current Income Tax Expense
That portion of the total income tax provision that is based on
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Income from Continuing Operations
After-tax net income before discontinued operations,
A form of earnings management designed to remove peaks and valleys
Income Tax Expense
See income tax provision.
A measure of results produced by the core operations of a firm. It is common
income subject to income tax as reported on the tax return.
income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment.
This is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs.
Life Income Fund
Commonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80.
Registered Retirement Income Fund (Canada)
Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.
A financial statement that displays a breakdown of total sales and total expenses.
Earned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits.
Mutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares.
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