|Cost Plus Estimated Earnings in Excess of Billings|
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Definition of Cost Plus Estimated Earnings in Excess of Billings
Cost Plus Estimated Earnings in Excess of Billings
Revenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts
Accelerated cost recovery system (ACRS)
Schedule of depreciation rates allowed for tax purposes.
earnings of a firm as reported on its income statement.
Agency cost view
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.
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
Amounts of directly contributed equity capital in excess of the par value.
costs that increase with increases in the level of investment in current assets.
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
Net income for the company during the period.
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Earnings per share (EPS)
EPS, as it is called, is a company's profit divided by its number of outstanding
Earnings retention ratio
Positive or negative differences from the consensus forecast of earnings by institutions
The ratio of earnings per share after allowing for tax and interest payments on fixed interest
The real flow of cash that a firm could pay out forever in the absence of any change in
For any entity, the difference between the market value of all its assets and the market
Equivalent annual cost
The equivalent cost per year of owning an asset over its entire life.
Any excess of actual reserves above required reserves.
Excess return on the market portfolio
The difference between the return on the market portfolio and the
Also called abnormal returns, returns in excess of those required by some asset pricing model.
The difference between the execution price of a security and the price that would have
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
A cost that is fixed in total for a given period of time and for given production levels.
costs, both implied and direct, associated with a transaction. Such costs include time, effort,
Fully diluted earnings per shares
earnings per share expressed as if all outstanding convertible securities
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.
Low price-earnings ratio effect
The tendency of portfolios of stocks with a low price-earnings ratio to
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
Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing
Opportunity cost of capital
Expected return that is foregone by investing in a project rather than in
The difference in the performance of an actual investment and a desired investment
ealers in government bonds normally give price quotes in 32nds. To quote a bid or offer in 64ths, they
Price/earnings ratio (PE ratio)
Shows the "multiple" of earnings at which a stock sells. Determined by dividing current
Price impact costs
Related: market impact costs
The surplus as measured using regulatory accounting principles (RAP) which may allow
cost to replace a firm's assets.
Accounting earnings that are retained by the firm for reinvestment in its operations;
Round-trip transactions costs
costs of completing a transaction, including commissions, market impact
costs associated with locating a counterparty to a trade, including explicit costs (such as
costs that fall with increases in the level of investment in current assets.
The surplus of an insurance company determined by the accounting treatment of both
costs that have been incurred and cannot be reversed.
Cash flow available after payment of taxes in the project.
Related: asset management
costs of buying and selling marketable securities and borrowing. Trading costs include
The time, effort, and money necessary, including such things as commission fees and the
True interest cost
For a security such as commercial paper that is sold on a discount basis, the coupon rate
A cost that is directly proportional to the volume of output produced. When production is zero,
Weighted average cost of capital
Expected return on a portfolio of all the firm's securities. Used as a hurdle
CAPITAL IN EXCESS OF PAR VALUE
What a company collected when it sold stock for more than the par value per share.
An asset’s purchase price, plus costs associated with the purchase, like installation fees, taxes, etc.
Cost of goods sold
The cost of merchandise that a company sold this year. For manufacturing companies, the cost of raw
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
MACRS (Modified Accelerated Cost Recovery System)
A depreciation method created by the IRS under the Tax Reform Act of 1986. Companies must use it to depreciate all plant and equipment assets installed after December 31, 1986 (for tax purposes).
Profits a company plowed back into the business over the years. Last January’s retained earnings, plus the net income or profit that a company made this year (which is calculated on the income statement), minus dividends paid out, equals the retained earnings balance on the balance sheet date.
A method of costing in which all fixed and variable production costs are charged to products or services using an allocation base.
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.
costs that are identifiable with and able to be influenced by decisions made at the business
The amount of cash expended.
A resource sacrificed or forgone to achieve a specific objective (Horngren et al.), defined
The idea that fixed costs and variable costs react differently to changes in the volume of
A division or unit of an organization that is responsible for controlling costs.
The process of either reducing costs while maintaining the same level of productivity or maintaining costs while increasing productivity.
The most significant cause of the cost of an activity, a measure of the demand for an activity
Anything for which a measurement of cost is required – inputs, processes, outputs or responsibility centres.
Cost of capital
The costs incurred by an organization to fund all its investments, comprising the risk-adjusted
Cost of goods sold
See cost of sales.
Cost of manufacture
The cost of goods manufactured for subsequent sale.
Cost of quality
The difference between the actual costs of production, selling and service and the costs that would be incurred if there were no failures during production or usage of products or services.
Cost of sales
The manufacture or purchase price of goods sold in a period or the cost of providing a service.
A method of pricing in which a mark-up is added to the total product/service cost.
The costs of (cross-functional) business processes, irrespective of the organizational structure of the business.
Cost–volume–profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
costs that are readily traceable to particular products or services.
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
costs that do not change with increases or decreases in the volume of goods or services
The cost of a product/service that includes an allocation of all the (production and
costs that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead.
A method of accounting that accumulates the costs of a product/service that is produced either
The non-salary or wage costs that follow from the payment of salaries or wages, e.g. National
An approach to costing that estimates and accumulates the costs of a product/service over
The cost of producing one extra unit.
The lost opportunity of not doing something, which may be financial or non-financial, e.g. time.
The costs that relate to a period of time.
The total of all direct costs.
A method of costing for continuous manufacture in which costs for an accounting compared are compared with production for the same period to determine a cost per unit produced.
The cost of goods or services produced.
The cost that is relevant to a particular decision – future, incremental cash flows.
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