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Definition of Common-base-year analysis
The representing of accounting information over multiple years as percentages
the process of detailing the various repetitive actions that are performed in making a product or
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
A relatively new method advocated for the
a process using multiple cost drivers to predict and allocate costs to products and services;
A cost allocation system that compiles costs and assigns
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
hours, machine hours or volume of production
Methods of financing in which lenders and equity investors look principally to the
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
A method developed by BARRA, a consulting firm in
Related: Benchmark interest rate.
The probability of not achieving a portfolio expected return.
The reference year when constructing a price index. By tradition it is given the value 100.
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals:
An analysis of the level of sales at which a project would make zero profit.
analysis of the level of sales at which the company breaks even.
An analytical technique for studying the relationships between fixed cost, variable cost, and profits. A breakeven chart graphically depicts the nature of breakeven analysis. The breakeven point represents the volume of sales at which total costs equal total revenues (that is, profits equal zero).
capital investment analysis
Refers to various techniques and procedures
Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the
A statistical technique that identifies clusters of stocks whose returns are highly correlated
common body of knowledge (CBK)
the minimum set of knowledge needed by a person to function effectively in a particular field
An agreement between two or more countries that permits the free movement of capital
Are equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends.
common-size balance sheet
Balance sheet that presents items as a percentage of total assets.
common-size income statement
Income statement that presents items as a percentage of revenues.
These are securities that represent equity ownership in a company. common shares let an
Shares of ownership sold to the public.
A financial security that represents an ownership claim on the
Ownership shares in a publicly held corporation.
That part of the capital stock of a corporation that carries voting rights and represents
Common stock equivalent
A convertible security that is traded like an equity issue because the optioned
Common stock market
The market for trading equities, not including preferred stock.
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings
Comparative credit analysis
A method of analysis in which a firm is compared to others that have a desired
an analytical technique that uses statistical
The calculation and comparison of the costs and benefits of a policy or project.
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
cost driver analysis
the process of investigating, quantifying,
Cost of Common Stock
The rate of return required by the investors in the common stock of
Cost–volume–profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
The process of analyzing information on companies and bond issues in order to estimate the
Procedure to determine the likelihood a customer will pay its bills.
A statistical process that links the probability of default to a specified set of financial ratios.
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
Treating cash flows as if they occur at the end of a year as opposed to the date
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
The examination of failure incidents to identify components
Financial Trend Analysis
Process of analyzing financial statements of a company for any continuing relationship.
The accounting period adopted by a business for the production of its financial statements.
A 12 month period over which a company reports on the activities that
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
An analysis of returns using total return to assess performance over some investment horizon.
The process of dividing each expense item of a given year by the same expense item in
a process of evaluating changes that
least squares regression analysis
a statistical technique that investigates the association between dependent and independent variables; it determines the line of "best fit" for a set of observations by minimizing the sum of the squares
Evaluation of risky prospects based on the expected value and variance of possible outcomes.
See money base.
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.
Cash plus deposits of the commercial banks with the central bank.
Multiple-discriminant analysis (MDA)
Statistical technique for distinguishing between two groups on the
a method of ranking the causes of variation
The 80:20 ratio that states that 20% of the variables included in an
Performance attribution analysis
The decomposition of a money manager's performance results to explain
Period between two policy anniversaries.
A budget that allocates funds in line with strategies.
Pro forma capital structure analysis
A method of analyzing the impact of alternative capital structure
A method of analysing financial reports to interpret trends and make comparisons by using ratios – two numbers, with one generally expressed as a percentage of the other.
A method of relating numbers from the various financial statements to one another in order to get meaningful information for comparison.
The process of using financial ratios, calculated from key accounts
A statistical technique that can be used to estimate relationships between variables.
Statistical analysis techniques that quantify the
Restatement of Prior-Year Financial Statements
A recasting of prior-year financial statements to remove the effects of an error or other adjustment and report them on a new basis.
Return on Common Equity Ratio
A measure of the percentage return earned on the value of the
The use of horizon analysis to project bond total returns under different reinvestment rates
Project analysis given a particular combination of assumptions.
analysis of the effect on a project's profitability due to changes in sales, cost, and so on.
An approach to understanding how changes in one variable of cost–volume–profit analysis are affected by changes in the other variables.
a process of determining the amount of change that must occur in a variable before a different decision would be made
analysis of the effects of changes in sales, costs, and so on, on project profitability.
Estimation of the probabilities of different possible outcomes, e.g., from an investment project.
An accelerated depreciation method that makes the sum of the digits in an asset’s expected
Method of accelerated depreciation.
Security analysis that seeks to detect and interpret patterns in past security prices.
A variety of approaches that emphasize increasing shareholder value as the primary goal of every business.
A method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved.
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
The process of dividing each expense item in the income statement of a given year by net
A financial analysis technique that relates key amounts on the income statement and balance sheet to a 100 percent or base figure for the present and previous year.
Yearly Renewable Term Insurance
Sometimes, simply called YRT, this is a form of term life insurance that may be renewed annually without evidence of insurability to a stated age.
a comprehensive budgeting process
A method of budgeting that ignores historical budgetary allocations and identifies the costs that are necessary to implement agreed strategies.
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