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Definition of Common-base-year analysis
The representing of accounting information over multiple years as percentages
Methods of financing in which lenders and equity investors look principally to the
BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in
Base interest rate
Related: Benchmark interest rate.
Base probability of loss
The probability of not achieving a portfolio expected return.
An analysis of the level of sales at which a project would make zero profit.
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
An agreement between two or more countries that permits the free movement of capital
These are securities that represent equity ownership in a company. common shares let an
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
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 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
The process of analyzing information on companies and bond issues in order to estimate the
A statistical process that links the probability of default to a specified set of financial ratios.
Treating cash flows as if they occur at the end of a year as opposed to the date
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
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
Evaluation of risky prospects based on the expected value and variance of possible outcomes.
Composed of currency and coins outside the banking system plus liabilities to the deposit money banks.
Multiple-discriminant analysis (MDA)
Statistical technique for distinguishing between two groups on the
Performance attribution analysis
The decomposition of a money manager's performance results to explain
Pro forma capital structure analysis
A method of analyzing the impact of alternative capital structure
A statistical technique that can be used to estimate relationships between variables.
The use of horizon analysis to project bond total returns under different reinvestment rates
analysis of the effect on a project's profitability due to changes in sales, cost, and so on.
Method of accelerated depreciation.
Security analysis that seeks to detect and interpret patterns in past security prices.
The process of dividing each expense item in the income statement of a given year by net
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:
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
An accelerated depreciation method that makes the sum of the digits in an asset’s expected
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.
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
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.
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
Cost–volume–profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
The accounting period adopted by a business for the production of its financial statements.
A budget that allocates funds in line with strategies.
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.
An approach to understanding how changes in one variable of cost–volume–profit analysis are affected by changes in the other variables.
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.
A method of budgeting that ignores historical budgetary allocations and identifies the costs that are necessary to implement agreed strategies.
Shares of ownership sold to the public.
A method of relating numbers from the various financial statements to one another in order to get meaningful information for comparison.
activity based costing (ABC)
A relatively new method advocated for the
capital investment analysis
Refers to various techniques and procedures
A financial security that represents an ownership claim on the
Cost of Common Stock
The rate of return required by the investors in the common stock of
The process of using financial ratios, calculated from key accounts
Return on Common Equity Ratio
A measure of the percentage return earned on the value of the
the process of detailing the various repetitive actions that are performed in making a product or
activity-based budgeting (ABB)
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
activity-based costing (ABC)
a process using multiple cost drivers to predict and allocate costs to products and services;
activity-based management (ABM)
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
common body of knowledge (CBK)
the minimum set of knowledge needed by a person to function effectively in a particular field
an analytical technique that uses statistical
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,
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
a method of ranking the causes of variation
a process of determining the amount of change that must occur in a variable before a different decision would be made
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
a comprehensive budgeting process
Statistical analysis techniques that quantify the
Activity-based costing (ABC)
A cost allocation system that compiles costs and assigns
A 12 month period over which a company reports on the activities that
The 80:20 ratio that states that 20% of the variables included in an
analysis of the level of sales at which the company breaks even.
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.
Ownership shares in a publicly held corporation.
Procedure to determine the likelihood a customer will pay its bills.
Project analysis given a particular combination of assumptions.
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.
The reference year when constructing a price index. By tradition it is given the value 100.
The calculation and comparison of the costs and benefits of a policy or project.
See money base.
Cash plus deposits of the commercial banks with the central bank.
That part of the capital stock of a corporation that carries voting rights and represents
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.
The examination of failure incidents to identify components
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.
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
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).
Are equity instruments that take no security against assets, have no fixed terms of repayment and pay no fixed dividends.
Financial Trend Analysis
Process of analyzing financial statements of a company for any continuing relationship.
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Period between two policy anniversaries.
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