|cash burn rate|
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Definition of cash burn rate
cash burn rate
A relatively recent term that refers to how fast a business
the rate of return on investment that would be required by a prudent investor to invest in an asset with a specific level risk. Also, a rate of return used to convert a monetary sum, payable or receivable in the future, into present value.
Same as PV, but usually includes a subtraction for an initial cash outlay.
the value in today’s dollars of cash flows that occur in different time periods.
Schedule of depreciation rates allowed for tax purposes.
Any depreciation method that produces larger deductions for depreciation in the
A strategy that uses available information and forecasting techniques to seek a
Publicly traded issues that may be collateralized by mortgages and MBSs.
Money after-tax rate of return minus the inflation rate.
The discount rate that reflects only the business risks of a project and abstracts from the
Swap in which the principal or national amount rises (falls) as interest rates
The periodic rate times the number of periods in a year. For example, a 5%
Arithmetic mean return.
Floating rate preferred stock, the dividend on which is adjusted every
The ratio of the average cash inflow to the amount invested.
Taxes as a fraction of income; total taxes divided by total taxable income.
A strategy in which the maturities of the securities included in the portfolio are concentrated
Base interest rate
Related: Benchmark interest rate.
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
Break-even payment rate
The prepayment rate of a MBS coupon that will produce the same CFY as that of
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
Broker loan rate
Related: Call money rate.
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
A passive investment strategy with no active buying and selling of stocks from the
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
The value of assets that can be converted into cash immediately, as reported by a company. Usually
A forecasted summary of a firm's expected cash inflows and cash outflows as well as its
Cash and carry
Purchase of a security and simultaneous sale of a future, with the balance being financed
Cash and equivalents
The value of assets that can be converted into cash immediately, as reported by a
The actual physical commodity, as distinguished from a futures contract.
Cash conversion cycle
The length of time between a firm's purchase of inventory and the receipt of cash
A company that pays out all earnings per share to stockholders as dividends. Or, a company or
In general, the time between cash disbursement and cash collection. In net working capital
Cash deficiency agreement
An agreement to invest cash in a project to the extent required to cover any cash
The provision of some futures contracts that requires not delivery of underlying assets but
An incentive offered to purchasers of a firm's product for payment within a specified time
A dividend paid in cash to a company's shareholders. The amount is normally based on
A short-term security that is sufficiently liquid that it may be considered the financial
In investments, it represents earnings before depreciation , amortization and non-cash charges.
Cash flow after interest and taxes
Net income plus depreciation.
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
Cash flow from operations
A firm's net cash inflow resulting directly from its regular operations
Cash flow matching
Also called dedicating a portfolio, this is an alternative to multiperiod immunization in
Cash flow per common share
cash flow from operations minus preferred stock dividends, divided by the
Cash flow time-line
Line depicting the operating activities and cash flows for a firm over a particular period.
Cash-flow break-even point
The point below which the firm will need either to obtain additional financing
Cash management bill
Very short maturity bills that the Treasury occasionally sells because its cash
Also called spot markets, these are markets that involve the immediate delivery of a security
A public equity issue that is sold to all interested investors.
The proportion of a firm's assets held as cash.
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
A transaction where exchange is immediate, as contrasted to a forward contract, which
Temporary investments of currently excess cash in short-term, high-quality
An amount the insurance company will pay if the policyholder ends a whole life
Refers to a situation where a firm runs out of cash and cannot readily sell marketable securities.
A strategy in which a put and with the same strike price and expiration are either both
A firm engaged in two or more unrelated businesses.
A merger involving two or more firms that are in unrelated businesses.
The acquisition of one firm by anther firm.
Debt obligations issued by corporations.
A legal document creating a corporation.
One of the three areas of the discipline of finance. It deals with the operation of the firm
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both
Corporate processing float
The time that elapses between receipt of payment from a customer and the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
rate of return required on a par bond to produce the same after-tax yield to
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
The interest rate offered on an investment type insurance policy.
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates
The return at which two alternative projects have the same net present value.
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Refers to multi-period cash flow matching.
The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is
Discounted cash flow (DCF)
Future cash flows multiplied by discount factors to obtain present values.
Discretionary cash flow
cash flow that is available after the funding of all positive NPV capital investment
The fixed or floating rate paid on preferred stock based on par value.
Dollar-weighted rate of return
Also called the internal rate of return, the interest rate that will make the
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
A measure of the time value of money that fully reflects the effects of compounding.
Equilibrium rate of interest
The interest rate that clears the market. Also called the market-clearing interest
Equivalent annual cash flow
Annuity with the same net present value as the company's proposed investment.
The price of one country's currency expressed in another country's currency.
Exchange Rate Mechanism (ERM)
The methodology by which members of the EMS maintain their
Exchange rate risk
Also called currency risk, the risk of an investment's value changing because of currency
Expected future cash flows
Projected future cash flows associated with an asset of decision.
Federal funds rate
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
A country's decision to tie the value of its currency to another country's currency, gold
A loan on which the rate paid by the borrower is fixed for the life of the loan.
In an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a
Floating exchange rate
A country's decision to allow its currency value to freely change. The currency is not
A guaranteed investment contract where the credit rating is tied to some variable
Floating-rate note (FRN)
Note whose interest payment varies with short-term interest rates.
In an interest rate swap, the counterparty who pays a rate based on a reference rate,
Preferred stock paying dividends that vary with short-term interest rates.
Forward exchange rate
Exchange rate fixed today for exchanging currency at some future date.
Forward interest rate
Interest rate fixed today on a loan to be made at some future date.
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