|Cash flow after interest and taxes|
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Definition of Cash flow after interest and taxes
Cash flow after interest and taxes
Net income plus depreciation.
the combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
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.
The accumulated coupon interest earned but not yet paid to the seller of a bond by the
The ratio of net income to net sales.
Money after-tax rate of return minus the inflation rate.
Swap in which the principal or national amount rises (falls) as interest rates
A situation wherein participants in a transaction have different net tax rates.
Related: Benchmark interest rate.
Also called the base interest rate, it is the minimum interest rate investors will
The requirement that a claim holder voting against a plan of reorganization
interest that is not immediately expensed, but rather is considered as an asset and is then
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
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 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.
interest paid on previously earned interest as well as on the principal.
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
A non-cash expense that provides a source of free cash flow. Amount allocated during the
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
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
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.
Expected future cash flows
Projected future cash flows associated with an asset of decision.
Government bonds that are acceptable at par in payment of federal estate taxes when owned by
An account for the investment credit to show all income statement benefits of the credit
The practice of reporting to shareholders using straight-line depreciation and
Forward interest rate
interest rate fixed today on a loan to be made at some future date.
Free cash flows
cash not required for operations or for reinvestment. Often defined as earnings before
General cash offer
A public offering made to investors at large.
interest earned before taxes are deducted.
Incremental cash flows
Difference between the firm's cash flows with and without a project.
The price paid for borrowing money. It is expressed as a percentage rate over a period of time and
Interest coverage ratio
The ratio of the earnings before interest and taxes to the annual interest expense. This
Interest coverage test
A debt limitation that prohibits the issuance of additional long-term debt if the issuer's
Interest equalization tax
Tax on foreign investment by residents of the U.S. which was abolished in 1974.
Contractual debt payments based on the coupon rate of interest and the principal amount.
Interest on interest
interest earned on reinvestment of each interest payment on money invested.
Interest-only strip (IO)
A security based solely on the interest payments form a pool of mortgages, Treasury
Interest rate agreement
An agreement whereby one party, for an upfront premium, agrees to compensate the
Interest rate cap
Also called an interest rate ceiling, an interest rate agreement in which payments are made
Interest rate ceiling
Related: interest rate cap.
Interest rate floor
An interest rate agreement in which payments are made when the reference rate falls
Interest rate on debt
The firm's cost of debt capital.
Interest rate parity theorem
interest rate differential between two countries is equal to the difference
Interest rate risk
The risk that a security's value changes due to a change in interest rates. For example, a
Interest rate swap
A binding agreement between counterparties to exchange periodic interest payments on
A firm's deduction of the interest payments on its debt from its earnings before it calculates
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
A firm's cash balance as reported in its financial statements. Also called book cash.
Net cash balance
Beginning cash balance plus cash receipts minus cash disbursements.
Nominal cash flow
A cash flow expressed in nominal terms if the actual dollars to be received or paid out are given.
Nominal interest rate
The interest rate unadjusted for inflation.
A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow.
The total number of derivative contracts traded that not yet been liquidated either by an
Operating cash flow
Earnings before depreciation minus taxes. It measures the cash generated from
Pooling of interests
An accounting method for reporting acquisitions accomplished through the use of equity.
Adjustment mechanism under the classical gold standard whereby
An agreement by the loan purchaser to allow the monthly loan quota to be
Rate of interest
The rate, as a proportion of the principal, at which interest is computed.
Real cash flow
A cash flow is expressed in real terms if the current, or date 0, purchasing power of the cash
Real interest rate
The rate of interest excluding the effect of inflation; that is, the rate that is earned in terms
Scheduled cash flows
The mortgage principal and interest payments due to be paid under the terms of the
This is the total number of shares of a security that investors have borrowed, then sold in the
interest calculated only on the initial investment. Related:compound interest.
Spot interest rate
interest rate fixed today on a loan that is made today. Related: forward interest rates.
Stated annual interest rate
The interest rate expressed as a per annum percentage, by which interest
Statement of cash flows
A financial statement showing a firm's cash receipts and cash payments during a
A method of cash budgeting that is organized along the lines of the statement of cash flows.
Symmetric cash matching
An extension of cash flow matching that allows for the short-term borrowing of
Target cash balance
Optimal amount of cash for a firm to hold, considering the trade-off between the
Earnings before interest and tax, divided by interest payments.
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