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Definition of Contra-equity account
An account that reduces an equity account. An example is Treasury stock.
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
The discount rate that reflects only the business risks of a project and abstracts from the
The ratio of total assets to stockholder equity.
The average project earnings after taxes and depreciation divided by the average
The weighted-average age of all of the firm's outstanding invoices.
A management style that de-emphasizes the significance of economic
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Net result of public and private international investment and lending activities.
Futures contracts, such as stock index futures, that settle for cash, not involving
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
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.
Indicator of financial leverage. Compares assets provided by creditors to assets provided
A common term for convertible bonds because of their equity component and the
accounts over which an individual or organization, other than the person in whose
Dual syndicate equity offering
An international equity placement where the offering is split into two
Represents ownership interest in a firm. Also the residual dollar value of a futures trading account,
An agreement in which one party, for an upfront premium, agrees to compensate the other at
Also called a residual claim, a claim to a share of earnings after debt obligation have been
The simultaneous purchase of an equity floor and sale of an equity cap.
Equity contribution agreement
An agreement to contribute equity to a project under certain specified
An agreement in which one party agrees to pay the other at specific time periods if a specific
Used to refer to warrants because they are usually issued attached to privately placed bonds.
Total assets divided by total common stockholders' equity; the amount of total assets per
Securities that give the holder the right to buy or sell a specified number of shares of stock, at
A swap in which the cash flows that are exchanged are based on the total return on some stock
Related: Variable life
Those holding shares of the firm's equity.
Securities sold in the Euromarket. That is, securities initially sold to investors
A guaranteed investment contract where the credit rating is tied to some variable
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
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
GEMs (growing-equity mortgages)
Mortgages in which annual increases in monthly payments are used to
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
The balance of a margin account. Related: buying on margin, initial margin requirement.
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
Stock in a firm that relies on financial leverage. Holders of leveraged equity face the
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
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
Next futures contract
The contract settling immediately after the nearby futures contract.
Nexus (of contracts)
A set or collection of something.
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
Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a
Method of accounting for a merger in which the acquirer is treated as having purchased
Regulatory accounting procedures
accounting principals required by the FHLB that allow S&Ls to elect
Return on equity (ROE)
Indicator of profitability. Determined by dividing net income for the past 12
Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals
This is a company's total assets minus total liabilities. A company's net worth is the
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
Balance sheet item that includes the book value of ownership in the corporation. It
The residual claims that stockholders have against a firm's assets, calculated by
Stratified equity indexing
A method of constructing a replicating portfolio in which the stocks in the index
account in which the bank takes all of the excess available funds at the close of each business
A contract that obligates the purchaser to take any product that is offered to it (and pay
Top-down equity management style
A management style that begins with an assessment of the overall
Total debt to equity ratio
A capitalization ratio comparing current liabilities plus long-term debt to
Treasury tax and loan account at a bank.
Turnkey construction contract
A type of construction contract under which the construction firm is
A guaranteed investment contract purchased with deposits over some future designated
Zero-balance account (ZBA)
A checking account in which zero balance is maintained by transfers of funds
Amounts a company owes to creditors.
Amounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts.
RATE OF RETURN ON STOCKHOLDERSâ€™ EQUITY
The percentage return or profit that management made on each dollar stockholders invested in a company. Hereâ€™s how you figure it:
RATIO OF DEBT TO STOCKHOLDERSâ€™ EQUITY
A ratio that shows which groupâ€”creditors or stockholdersâ€”has the biggest stake in or the most control of a company:
STOCKHOLDERSâ€™ (OR OWNERSâ€™) EQUITY
The value of the ownersâ€™ interests in a company.
An explanation or report in financial terms about the transactions of an organization.
The process of satisfying stakeholders in the organization that managers have acted in the best interests of the stakeholders, a result of the stewardship function of managers, which takes place through accounting.
A collection of systems and processes used to record, report and interpret business transactions.
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The period of time for which financial statements are produced â€“ see also financial year.
Accounting rate of return (ARR)
A method of investment appraisal that measures
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
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