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Financial Terms | |
Corporate financial management |
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Definition of Corporate financial managementCorporate financial managementThe application of financial principals within a corporation to create and
Related Terms:Abusive Earnings ManagementThe use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result. Abusive Earnings ManagementA characterization used by the Securities and Exchange 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 Asset/liability managementAlso called surplus management, the task of managing funds of a financial Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit CommitteesA committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial Bottom-up equity management styleA management style that de-emphasizes the significance of economic Cash management billVery short maturity bills that the Treasury occasionally sells because its cash ![]() Certified Management Accountant (CMA)a professional designation in the area of management accounting that Changes in Financial PositionSources of funds internally provided from operations that alter a company's chief financial officer (CFO)Officer who oversees the treasurer and controller and sets overall financial strategy. Corporate acquisitionThe acquisition of one firm by anther firm. Corporate bondsDebt obligations issued by corporations. Corporate charterA legal document creating a corporation. Corporate financeOne of the three areas of the discipline of finance. It deals with the operation of the firm Corporate financial planningfinancial planning conducted by a firm that encompasses preparation of both Corporate processing floatThe time that elapses between receipt of payment from a customer and the ![]() Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to cost management system (CMS)a set of formal methods costs of financial distressCosts arising from bankruptcy or distorted business decisions before bankruptcy. Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Earnings ManagementThe active manipulation of earnings toward a predetermined target. External Financial Statementscorporate financial statements that have been reported on by an external independent accountant. Financial accountingThe production of financial statements, primarily for those interested parties who are external to the business. financial accountinga discipline in which historical, monetary Financial analystsAlso called securities analysts and investment analysts, professionals who analyze Financial assetsClaims on real assets. financial assetsClaims to the income generated by real assets. Also called securities. Financial AssistanceEconomic assistance provided by unrelated third parties, typically government agencies. They may take the form of loans, loan guarantees, subsidies, tax allowances, contributions, or cost-sharing arrangements. financial budgeta plan that aggregates monetary details Financial controlThe management of a firm's costs and expenses in order to control them in relation to Financial CovenantA feature of a debt or credit agreement that is designed to protect the lender or creditor. It is common to characterize covenants as either positive or negative covenants. Financial CovenantsA promise made related to financial conditions or events. Often a promise not to allow certain balance sheet items or ratios to fall below an agreed level. Usually found in loan documents, as a protection mechanism. Financial distressEvents preceding and including bankruptcy, such as violation of loan contracts. Financial distress costsLegal and administrative costs of liquidation or reorganization. Also includes Financial engineeringCombining or dividing existing instruments to create new financial products. Financial futureA contract entered into now that provides for the delivery of a specified asset in exchange financial incentivea monetary reward provided for performance Financial IncentiveAn expression of economic benefit that motivates behavior that might otherwise not take place. Financial intermediariesInstitutions that provide the market function of matching borrowers and lenders or financial intermediaryFirm that raises money from many small investors and provides financing to businesses or other Financial IntermediaryAny institution, such as a bank, that takes deposits from savers and loans them to borrowers. Financial IntermediationThe process whereby financial intermediaries channel funds from lender/savers to borrower/spenders. Financial leaseLong-term, non-cancelable lease. Financial LeaseLease in which the service provided by the lessor to the lessee is limited to financing equipment. All other responsibilities related to the possession of equipment, such as maintenance, insurance, and taxes, are borne by the lessee. A financial lease is usually noncancellable and is fully paid out amortized over its term. Financial leverageUse of debt to increase the expected return on equity. financial leverage is measured by financial leverageThe equity (ownership) capital of a business can serve financial leverageDebt financing amplifies the effects of changes in operating income on the returns to stockholders. Financial leverage clienteleA group of investors who have a preference for investing in firms that adhere to Financial leverage ratiosRelated: capitalization ratios. Financial marketAn organized institutional structure or mechanism for creating and exchanging financial assets. financial marketsMarkets in which financial assets are traded. Financial Numbers GameThe use of creative accounting practices to alter a financial statement Financial objectivesObjectives of a financial nature that the firm will strive to accomplish during the period Financial planA financial blueprint for the financial future of a firm. Financial planningThe process of evaluating the investing and financing options available to a firm. It Financial PositionStatus of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement. Financial pressThat portion of the media devoted to reporting financial news. Financial ratioThe result of dividing one financial statement item by another. Ratios help analysts interpret financial reports and statementsfinancial means having to do with Financial reports or statementsThe Profit and Loss account, Balance Sheet and Cash Flow statement of a business. Financial riskThe risk that the cash flow of an issuer will not be adequate to meet its financial obligations. financial riskRisk to shareholders resulting from the use of debt. financial slackReady access to cash or debt financing. Financial Trend AnalysisProcess of analyzing financial statements of a company for any continuing relationship. Financial yearThe accounting period adopted by a business for the production of its financial statements. Fraudulent Financial ReportingIntentional misstatements or omissions of amounts or disclosures Future-Oriented Financial InformationInformation about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection. Institute of Management Accountants (IMA)an organization composed of individuals interested in the field of management accounting; it coordinates the Certified management London International Financial Futures Exchange (LIFFE)A London exchange where Eurodollar futures London International Financial Futures Exchange (LIFFE)London exchange where Eurodollar futures as well as futures-style options are traded. Long-term financial planfinancial plan covering two or more years of future operations. Managementmanagement refers to the individuals in an entity that have the authority and the responsibility to manage the entity. The positions of these individuals, and their titles, vary from one entity to another and, to some extent, from one country to another depending on the local laws and customs. Thus, when the context requires it, the term includes the board of directors or committees of the board which are designated to oversee certain matters (e.g., audit committee). Management accountingThe production of financial and non-financial information used in planning for the future; making decisions about products, services, prices and what costs to incur; and ensuring that plans are implemented and achieved. management accountinga discipline that includes almost Management Accounting Guidelines (MAGs)pronouncements of the Society of management Accountants of Management buyout (MBO)Leveraged buyout whereby the acquiring group is led by the firm's management. management buyout (MBO)Acquisition of the firm by its own management in a leveraged buyout. Management/closely held sharesPercentage of shares held by persons closely related to a company, as management controlThis is difficult to define in a few words—indeed, an management control system (MCS)an information system that helps managers gather information about actual organizational occurrences, make comparisons against plans, management expense ratio (MER)The total expenses expressed as an annualized percentage of daily average net assets. MER does not include brokerage fees and commissions, which are also payable by the Fund. Management feeAn investment advisory fee charged by the financial advisor to a fund based on the fund's management feeThe fee paid to the fund’s manager for supervising the administration of the fund. management information system (MIS)a structure of interrelated elements that collects, organizes, and communicates management stylethe preference of a manager in how he/she interacts with other stakeholders in the organization; Money managementRelated: Investment management. Non-financial servicesInclude such things as freight, insurance, passenger services, and travel. Notes to the financial statementsA detailed set of notes immediately following the financial statements in open-book managementa philosophy about increasing a firm’s performance by involving all workers and by ensuring Operational Earnings Managementmanagement actions taken in the effort to create stable Passive investment managementBuying a well-diversified portfolio to represent a broad-based market Perfectly competitive financial marketsMarkets in which no trader has the power to change the price of performance management systema system reflecting the entire package of decisions regarding performance measurement and evaluation Portfolio managementRelated: Investment management Pro forma financial statementsfinancial statements as adjusted to reflect a projected or planned transaction. Published Financialfinancial statements and financial information made public. 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