|Bottom-up equity management style|
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Definition of Bottom-up equity management style
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
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
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
Total quantity of goods and services supplied.
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.
The discount rate that reflects only the business risks of a project and abstracts from the
An option contract that can be exercised at any time between the date of purchase and
The ratio of total assets to stockholder equity.
Also called surplus management, the task of managing funds of a financial
1) When bond yields and prices fall, the market is said to back-up.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
A commonly used term that refers to the net income (profit)
Cash management bill
Very 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
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
An account that reduces an equity account. An example is Treasury stock.
Corporate financial management
The application of financial principals within a corporation to create and
cost management system (CMS)
a set of formal methods
Cost of Equity
Same as the cost of common stock. Sometimes viewed as the
The periodic interest payment made to the bondholders during the life of the bond.
Detachable certificate attached to a bond that shows the amount of
The interest payments paid to the bondholder.
The annual interest payment associated with a bond.
Any bond with a coupon. Contrast with discount bond.
Coupon / Coupons
The periodic interest payment(s) made by the issuer of a bond
The dates when the coupons are paid. Typically a bond pays
Coupon equivalent yield
True interest cost expressed on the basis of a 365-day year.
A bond's interest payments.
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
The rate of interest paid on a debt security. Generally stated on an
The nominal interest rate that the issuer promises to pay the
Annual interest payment as a percentage of face value.
A bond selling at or close to par, that is, a bond with a coupon close to the yields currently
Related: Benchmark issues
Indicator of financial leverage. Compares assets provided by creditors to assets provided
A comparison of debt to equity in a company's capital structure.
A widely used financial statement ratio to assess the
A common term for convertible bonds because of their equity component and the
Demand Management Policy
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
Dual syndicate equity offering
An international equity placement where the offering is split into two
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
The active manipulation of earnings toward a predetermined target.
Represents ownership interest in a firm. Also the residual dollar value of a futures trading account,
Funds raised from shareholders.
Amounts contributed to the company by the owners (contributed capital) plus the residual earnings of the business (retained earnings).
Refers to one of the two basic sources of capital for a business, the
The difference between the total of all recorded assets and liabilities on the balance
Ownership. Common stock represents equity in a corporation.
The net worth of a business, consisting of capital stock, capital (or paid-in) surplus (or retained earnings), and, occasionally, certain net worth reserves. Common equity is that part of the total net worth belonging to the common shareholders. Total equity includes preferred shareholders. The terms common stock, net worth, and common equity are frequently used interchangeably.
The net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares or stocks are often known as equities.
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Refers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount.
An agreement in which one party, for an upfront premium, agrees to compensate the other at
Also called a residual claim, a claim to a share of earnings after debt obligation have been
The simultaneous purchase of an equity floor and sale of an equity cap.
Equity contribution agreement
An agreement to contribute equity to a project under certain specified
An agreement in which one party agrees to pay the other at specific time periods if a specific
Through equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock.
Used to refer to warrants because they are usually issued attached to privately placed bonds.
Related: Variable life
Accounting method for an equity security in cases where the investor has sufficient
Total assets divided by total common stockholders' equity; the amount of total assets per
Securities that give the holder the right to buy or sell a specified number of shares of stock, at
An ownership interest in an enterprise, including preferred and common stock.
A swap in which the cash flows that are exchanged are based on the total return on some stock
Those holding shares of the firm's equity.
equivalent units of production (EUP)
an approximation of the number of whole units of output that could have been
Securities sold in the Euromarket. That is, securities initially sold to investors
An option contract that can only be exercised on the expiration date.
Buying or selling to offset an existing market position.
A situation in which supply exceeds demand.
The amount of securities believed to be available for immediate purchase, that is, in the
Foreign Corrupt Practices Act (FCPA)
a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
Full coupon bond
A bond with a coupon equal to the going market rate, thereby, the bond is selling at par.
GEMs (growing-equity mortgages)
Mortgages in which annual increases in monthly payments are used to
The loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon
Group Life Insurance
This is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
Group of five (G5/G-5)
The five leading countries (France, Germany, Japan, United Kingdom, and the U.S.) that
Group of seven (G7/G-7)
The G-5 countries plus Canada and Italy.
Group rotation manager
A top-down manager who infers the phases of the business cycle and allocates
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
Institute of Management Accountants (IMA)
an organization composed of individuals interested in the field of management accounting; it coordinates the Certified management
The balance of a margin account. Related: buying on margin, initial margin requirement.
A legal proceeding for liquidating or reorganizing a business.
Bond with a stream of coupon payments that are the same throughout the life of the bond.
Stock in a firm that relies on financial leverage. Holders of leveraged equity face the
CDs that are issued with the tacit understanding that the buyer will not trade the certificate.
1) Bonds or notes with a long current maturity.
1) Bonds or notes with a long current maturity.
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
management refers to the individuals in an entity that have the authority and the responsibility to manage the entity. The positions of these individuals, and their titles, vary from one entity to another and, to some extent, from one country to another depending on the local laws and customs. Thus, when the context requires it, the term includes the board of directors or committees of the board which are designated to oversee certain matters (e.g., audit committee).
The production of financial and non-financial information used in planning for the future; making decisions about products, services, prices and what costs to incur; and ensuring that plans are implemented and achieved.
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