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Financial Terms | |
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Definition ofCash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations
Related Terms:"Soft" Capital RationingCapital rationing that under certain circumstances can be violated or even viewed Acceleration ClauseClause causing repayment of a debt, if specified events occur or are not met. Accelerationist HypothesisBelief that an effort to keep unemployment below its natural rate results in an accelerating inflation. accounts receivable turnover ratioA ratio computed by dividing annual Accrued Incomeincome 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. Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' Acid-test ratioAlso called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid ![]() ACID-TEST RATIOA ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula: Acid-test RatioSee quick ratio acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable Adjusted Cash Flow Provided by Continuing Operationscash flow provided by operating Adjusted Income from ContinuingOperations Reported income from continuing operations Appraisal ratioThe signal-to-noise ratio of an analyst's forecasts. The ratio of alpha to residual standard Articles of incorporationLegal document establishing a corporation and its structure and purpose. Asset activity ratiosratios that measure how effectively the firm is managing its assets. Asset/equity ratioThe ratio of total assets to stockholder equity. ![]() asset turnover ratioA broad-gauge ratio computed by dividing annual Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off Book IncomePretax income reported on the income statement. Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Capital FlowsPurchase by foreigners of our assets (capital inflows) or our purchase of foreign assets (capital outflows). Capital rationingPlacing one or more limits on the amount of new investment undertaken by a firm, either capital rationinga condition that exists when there is an capital rationingLimit set on the amount of funds available for investment. Capitalization ratiosAlso called financial leverage ratios, these ratios compare debt to total capitalization ![]() CashThe value of assets that can be converted into cash immediately, as reported by a company. Usually CashAmounts held in currency and coin (commonly referred to as petty cash) and amounts on deposit in financial institutions. CashCurrency, coin, and funds on deposit that are available for immediate withdrawal without Cash accountingA method of accounting in which profit is calculated as the difference between income Cash and carryPurchase of a security and simultaneous sale of a future, with the balance being financed CASH AND CASH EQUIVALENTSThe balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid. Cash and equivalentsThe value of assets that can be converted into cash immediately, as reported by a Cash budgetA forecasted summary of a firm's expected cash inflows and cash outflows as well as its cash burn rateA relatively recent term that refers to how fast a business Cash commodityThe actual physical commodity, as distinguished from a futures contract. Cash conversion cycleThe length of time between a firm's purchase of inventory and the receipt of cash cash conversion cyclePeriod between firm’s payment for materials Cash costThe amount of cash expended. Cash cowA company that pays out all earnings per share to stockholders as dividends. Or, a company or cash cowBusiness that produces a lot of cash but few growth prospects. Cash cycleIn general, the time between cash disbursement and cash collection. In net working capital Cash CycleThe length of time between a purchase of materials and collection of accounts receivable generated by the sale of the products made from the materials. Cash deficiency agreementAn agreement to invest cash in a project to the extent required to cover any cash Cash deliveryThe provision of some futures contracts that requires not delivery of underlying assets but Cash discountAn incentive offered to purchasers of a firm's product for payment within a specified time Cash dividendA dividend paid in cash to a company's shareholders. The amount is normally based on cash dividendPayment of cash by the firm to its shareholders. Cash equivalentA short-term security that is sufficiently liquid that it may be considered the financial Cash-equivalent itemsTemporary investments of currently excess cash in short-term, high-quality Cash EquivalentsHighly liquid, fixed-income investments with original maturities of three months or less. Cash EquivalentsInstruments or investments of such high liquidity and safety that they are virtually equal to cash. Cash flowIn investments, it represents earnings before depreciation , amortization and non-cash charges. cash flowAn obvious but at the same time elusive term that refers to cash cash flowthe receipt or disbursement of cash; when related Cash flowcash received and paid over time. Cash FlowIn investments, NET income plus DEPRECIATION and other noncash charges. In this sense, it is synonymous with cash EARNINGS. Investors focus on cash flow from operations because of their concern with a firm's ability to pay dividends. Cash flow after interest and taxesNet income plus depreciation. Cash-flow break-even pointThe point below which the firm will need either to obtain additional financing Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash Flow ForecastAn estimate of the timing and amount of a company's inflows and outflows of money measured over a specific period of time typically monthly for one to two years then annually for an additional one to three years. cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash Cash flow from operationsA firm's net cash inflow resulting directly from its regular operations Cash flow matchingAlso called dedicating a portfolio, this is an alternative to multiperiod immunization in Cash flow per common sharecash flow from operations minus preferred stock dividends, divided by the Cash Flow Provided by Operating ActivitiesWith some exceptions, the cash effects of transactions Cash Flow Provided or Used from Financing Activitiescash receipts and payments involving Cash Flow Provided or Used from Investing Activitiescash receipts and payments involving CASH-FLOW STATEMENTA statement that shows where a company’s cash came from and where it went for a period of time, such as a year. Cash Flow statementA financial report that shows the movement in cash for a business during an accounting period. Cash flow time-lineLine depicting the operating activities and cash flows for a firm over a particular period. CASH FLOWS FROM FINANCING ACTIVITIESA section on the cash-flow statement that shows how much cash a company raised by selling stocks or bonds this year and how much was paid out for cash dividends and other finance-related obligations. CASH FLOWS FROM INVESTING ACTIVITIESA section on the cashflow statement that shows how much cash came in and went out because of various investing activities like purchasing machinery. CASH FLOWS FROM OPERATIONSA section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business. Cash management billVery short maturity bills that the Treasury occasionally sells because its cash Cash marketsAlso called spot markets, these are markets that involve the immediate delivery of a security Cash offerA public equity issue that is sold to all interested investors. Cash ratioThe proportion of a firm's assets held as cash. Cash Ratioratio of cash and cash equivalents to liabilities; in the case of a bank, the ratio of cash to total deposit liabilities. Cash receipts journalA journal used to record the transactions that result in a debit to cash. Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Cash-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life Cash Surrender ValueThis is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications. Cash Surrender ValueBenefit that entitles a policy owner to an amount of money upon cancellation of a policy. Cash transactionA transaction where exchange is immediate, as contrasted to a forward contract, which Cash TurnoverThe number of cash cycles completed in one year. Cash value added (CVA)A method of investment appraisal that calculates the ratio of the net present value of an CashoutRefers to a situation where a firm runs out of cash and cannot readily sell marketable securities. Circular Flowincome payments to factors of production are spent to buy output. The receipts from these sales are used to pay factors of production, creating a circular flow of income. common-size income statementincome statement that presents items as a percentage of revenues. Common stock ratiosratios that are designed to measure the relative claims of stockholders to earnings Concentration accountA single centralized account into which funds collected at regional locations concentration bankingSystem whereby customers make payments to a regional collection center which transfers funds to Concentration servicesMovement of cash from different lockbox locations into a single concentration Configuration auditA review of all engineering documentation used as the basis Configuration controlVerifying that a delivered product matches authorizing contribution margin ratiothe proportion of each revenue dollar remaining after variable costs have been covered; Controlled foreign corporation (CFC)A foreign corporation whose voting stock is more than 50% owned Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |