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Definition of Contra-asset account
An offset to an asset account that reduces the balance of the asset account.
Refers to accounts receivable from credit sales to customers
The change in the value of a firm's foreign currency denominated accounts due to a
Earnings of a firm as reported on its income statement.
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
The ease and quickness with which assets can be converted to cash.
Money owed to suppliers.
Money owed by customers.
The ratio of net credit sales to average accounts receivable, a measure of how
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Any possession that has value in an exchange.
The ratio of total assets to stockholder equity.
Also called surplus management, the task of managing funds of a financial
Ratios that measure how effectively the firm is managing its assets.
The decision regarding how an institution's funds should be distributed among the
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Categories of assets, such as stocks, bonds, real estate and foreign securities.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
Asset for asset swap
Creditors exchange the debt of one defaulting borrower for the debt of another
Asset pricing model
A model for determining the required rate of return on an asset.
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
A firm's productive resources.
A common element of a financial plan that describes projected capital spending and the
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average age of accounts receivable
The weighted-average age of all of the firm's outstanding invoices.
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Net result of public and private international investment and lending activities.
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
A single centralized account into which funds collected at regional locations
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual
The month in which futures contracts may be satisfied by making or accepting a delivery.
Cumulative Translation Adjustment (CTA) account
An entry in a translated balance sheet in which gains
Net flow of goods, services, and unilateral transactions (gifts) between countries.
Value of cash, accounts receivable, inventories, marketable securities and other assets that
accounts over which an individual or organization, other than the person in whose
Dynamic asset allocation
An asset allocation strategy in which the asset mix is mechanistically shifted in
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Claims on real assets.
Long-lived property owned by a firm that is used by a firm in the production of its income.
Fixed asset turnover ratio
The ratio of sales to fixed assets.
A guaranteed investment contract where the credit rating is tied to some variable
A cash market transaction in which delivery of the commodity is deferred until after the
Forward forward contract
In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to
Agreement to buy or sell a set number of shares of a specific stock in a designated future
Futures contract multiple
A constant, set by an exchange, which when multiplied by the futures price gives
Generally Accepted Accounting Principals (GAAP)
A technical accounting term that encompasses the
Guaranteed insurance contract
A contract promising a stated nominal interest rate over some specific time
Guaranteed investment contract (GIC)
A pure investment product in which a life company agrees, for a
A contract that obligates a purchaser of a project's output to make cash
A legal claim to some future benefit, typically a claim to future cash. Goodwill, intellectual
Special accounts where you can save and invest, and the taxes are deferred until money
An agreement between two or more firms to share risk and financing responsibility in
asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.
Value of property, equipment and other capital assets minus the depreciation. This is an
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
Money market demand account
An account that pays interest based on short-term interest rates.
Most distant futures contract
When several futures contracts are considered, the contract settling last.
Nearby futures contract
When several futures contracts are considered, the contract with the closest
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
Next futures contract
The contract settling immediately after the nearby futures contract.
Nexus (of contracts)
A set or collection of something.
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
An account carried by one futures commission merchant with another futures commission
Arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt,
contracts which have been bought or sold without the transaction having been completed by
The contract that balances the three types of agency costs (contracting, monitoring, and
A contract that, in exchange for the option price, gives the option buyer the right, but not
Options contract multiple
A constant, set at $100, which when multiplied by the cash index value gives the
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
Publicly traded assets
assets that can be traded in a public market, such as the stock market.
Method of accounting for a merger in which the acquirer is treated as having purchased
Current assets minus inventories.
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a
Regulatory accounting procedures
accounting principals required by the FHLB that allow S&Ls to elect
A tangible asset with physical properties that can be reproduced, such as a building or
assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months
Return on total assets
The ratio of earnings available to common stockholders to total assets.
Riskless or risk-free asset
An asset whose future return is known today with certainty. The risk free asset is
An asset whose future return is uncertain.
An asset whose future return is known today with certainty.
Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals
Statement of Financial Accounting Standards No. 8
This is a currency translation standard previously in
Statement of Financial Accounting Standards No. 52
This is the currency translation standard currently
account in which the bank takes all of the excess available funds at the close of each business
Tactical Asset Allocation (TAA)
An asset allocation strategy that allows active departures from the normal
A contract that obligates the purchaser to take any product that is offered to it (and pay
An asset whose value depends on particular physical properties. These i nclude reproducible
Total asset turnover
The ratio of net sales to total assets.
Treasury tax and loan account at a bank.
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