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Definition of Controller
The corporate manager responsible for the firm's accounting activities.
the chief accountant (in a corporation) who is responsible
Officer responsible for budgeting, accounting, and auditing.
Officer who oversees the treasurer and controller and sets overall financial strategy.
Schedule of depreciation rates allowed for tax purposes.
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.
The physical commodity underlying a futures contract. Cash commodity, physical.
A bond covenant that specifies certain actions the firm must take.
The argument that specifies that the various agency costs create a complex environment in
The incremental costs of having an agent make decisions for a principal.
Total costs, explicit and implicit.
Articles of incorporation
Legal document establishing a corporation and its structure and purpose.
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.
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The process of choosing the firm's long-term capital assets.
costs that increase with increases in the level of investment in current assets.
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's
he written statement that follows any "trade" in the securities markets. Confirmation is issued
Controlled foreign corporation (CFC)
A foreign corporation whose voting stock is more than 50% owned
The acquisition of one firm by anther firm.
Debt obligations issued by corporations.
A legal document creating a corporation.
One of the three areas of the discipline of finance. It deals with the operation of the firm
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
financial planning conducted by a firm that encompasses preparation of both
Corporate processing float
The time that elapses between receipt of payment from a customer and the
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
A legal "person" that is separate and distinct from its owners. A corporation is allowed to own
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
Cost of capital
The required return for a capital budgeting project.
Cost of carry
Related: Net financing cost
Cost of funds
Interest rate associated with borrowing money.
Cost of lease financing
A lease's internal rate of return.
Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital
The net present value of an investment divided by the investment's initial cost. Also called
Country financial risk
The ability of the national economy to generate enough foreign exchange to meet
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Domestic International Sales Corporation (DISC)
A U.S. corporation that receives a tax incentive for
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Specialized banking institutions, authorized and chartered by the Federal Reserve Board
Equivalent annual cost
The equivalent cost per year of owning an asset over its entire life.
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
The difference between the execution price of a security and the price that would have
Federal Deposit Insurance Corporation (FDIC)
A federal institution that insures bank deposits.
Also called securities analysts and investment analysts, professionals who analyze
Claims on real assets.
The management of a firm's costs and expenses in order to control them in relation to
Events preceding and including bankruptcy, such as violation of loan contracts.
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
Combining or dividing existing instruments to create new financial products.
A contract entered into now that provides for the delivery of a specified asset in exchange
Institutions that provide the market function of matching borrowers and lenders or
Long-term, non-cancelable lease.
Use of debt to increase the expected return on equity. financial leverage is measured by
Financial leverage clientele
A group of investors who have a preference for investing in firms that adhere to
Financial leverage ratios
Related: capitalization ratios.
An organized institutional structure or mechanism for creating and exchanging financial assets.
Objectives of a financial nature that the firm will strive to accomplish during the period
A financial blueprint for the financial future of a firm.
The process of evaluating the investing and financing options available to a firm. It
That portion of the media devoted to reporting financial news.
The result of dividing one financial statement item by another. Ratios help analysts interpret
The risk that the cash flow of an issuer will not be adequate to meet its financial obligations.
Refers to an order to buy or sell that can be executed without confirmation for some fixed period. Also,
Firm commitment underwriting
An undewriting in which an investment banking firm commits to buy the
Firm's net value of debt
Total firm value minus total firm debt.
See:diversifiable risk or unsystematic risk.
A cost that is fixed in total for a given period of time and for given production levels.
Foreign Sales Corporation (FSC)
A special type of corporation created by the Tax Reform Act of 1984 that
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
costs, both implied and direct, associated with a transaction. Such costs include time, effort,
Generally Accepted Accounting Principals (GAAP)
A technical accounting term that encompasses the
Group rotation manager
A top-down manager who infers the phases of the business cycle and allocates
A money manager who seeks to buy stocks that are typically selling at relatively high P/E
The whole-dollar price of a bid or offer is referred to as the handle (ie. if a security is quoted at
Incremental costs and benefits
costs and benefits that would occur if a particular course of action were
Transaction costs that include the assessment of the investment merits of a financial asset.
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by the
Also called a portfolio manager and money manager, the individual who manages a
Special accounts where you can save and invest, and the taxes are deferred until money
The commercial or investment bank with the primary responsibility for organizing syndicated
London International Financial Futures Exchange (LIFFE)
A London exchange where Eurodollar futures
Value of property, equipment and other capital assets minus the depreciation. This is an
Long-term financial plan
financial plan covering two or more years of future operations.
London International Financial Futures Exchange (LIFFE)
London exchange where Eurodollar futures as well as futures-style options are traded.
Decisions concerning the operation of the firm, such as the choice of firm size, firm
Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.
Market timing costs
costs that arise from price movement of the stock during the time of the transaction
Related: Investment manager.
Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock
A firm that operates in more than one country.
Neglected firm effect
The tendency of firms that are neglected by security analysts to outperform firms that
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