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Financial Terms | |
Cramdown |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
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Definition of CramdownCramdownThe ability of the bankruptcy court to confirm a plan of reorganization over the objections of
Related Terms:401k PlanA retirement plan set up by an employer, into which employees can 403b PlanA retirement plan similar to a 401k plan, except that it is designed Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. AccountabilityThe 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. Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how accounts receivable turnover ratioA ratio computed by dividing annual Aggregate planningA budgeting process using summary-level information to ![]() applied overheadthe amount of overhead that has been assigned to Work in Process Inventory as a result of productive activity; credits for this amount are to an overhead account Asset classesCategories of assets, such as stocks, bonds, real estate and foreign securities. Asset CoverageExtent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position. Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset/liability managementAlso called surplus management, the task of managing funds of a financial Asset turnoverThe ratio of net sales to total assets. asset turnovera ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets asset turnover ratioA broad-gauge ratio computed by dividing annual Availability floatChecks deposited by a company that have not yet been cleared. ![]() availability floatChecks already deposited that have not yet been cleared. Baker PlanA plan by U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor Bank overdraftMoney owed to the bank in a cheque account where payments exceed receipts. BankruptcyState of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from bankruptcyThe reorganization or liquidation of a firm that cannot pay its debts. Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk. Bankruptcy viewThe argument that expected bankruptcy costs preclude firms from being financed entirely Base probability of lossThe probability of not achieving a portfolio expected return. Best-interests-of-creditors testThe requirement that a claim holder voting against a plan of reorganization Cafeteria PlanA flexible benefits plan authorized under the Internal Revenue ![]() cafeteria plan a “menu” of fringe benefit options that includecash or nontaxable benefits Canada Pension Plan (CPP)A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec). capital recoveryRefers to recouping, or regaining, invested capital over Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash TurnoverThe number of cash cycles completed in one year. Confirmationhe written statement that follows any "trade" in the securities markets. confirmation is issued Contingent LiabilityAn obligation that is dependent on the occurrence or nonoccurrence of Contingent pension liabilityUnder ERISA, the firm is liable to the plan participants for up to 39% of the net Corporate financial planningFinancial planning conducted by a firm that encompasses preparation of both CoverThe purchase of a contract to offset a previously established short position. Coverage ratiosRatios used to test the adequacy of cash flows generated through earnings for purposes of Coverdell Education IRAA form of individual retirement account whose earnings Covered callA short call option position in which the writer owns the number of shares of the underlying Covered call writing strategyA strategy that involves writing a call option on securities that the investor Covered interest arbitrageA portfolio manager invests dollars in an instrument denominated in a foreign Covered or hedge option strategiesStrategies that involve a position in an option as well as a position in the Covered PutA put option position in which the option writer also is short the corresponding stock or has CreditorsPurchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a Crossover rateThe return at which two alternative projects have the same net present value. Cumulative probability distributionA function that shows the probability that the random variable will Current liabilityThis is typically the accounts payable, short-term notes payable, and Debt-service coverage ratioEarnings before interest and income taxes plus one-third rental charges, divided Deferred Tax LiabilityFuture tax obligation that results from the origination of a temporary Defined benefit planA pension plan in which the sponsor agrees to make specified dollar payments to Defined Benefit PlanA pension plan that pays out a predetermined dollar Defined contribution planA pension plan in which the sponsor is responsible only for making specified Defined Contribution PlanA qualified retirement plan under which the employer design for manufacturability (DFM)a process that is part of the project management of a new product; concerned with finding optimal solutions to minimizing product failures DisabilityInability to work due to injury or sickness. Disability InsuranceInsurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period. Disability Insurance (Credit Insurance)Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a DLOM (discount for lack of marketability)an amount or percentage deducted from an equity interest to reflect lack of marketability. Doctrine of sovereign immunityDoctrine that says a nation may not be tried in the courts of another country Educational Assistance PlanA plan that an employer creates on behalf of its Employee stock ownership plan (ESOP)A company contributes to a trust fund that buys stock on behalf of Employee Stock Ownership Plan (ESOP)a profit-sharing compensation program in which investments are made in Employee Stock Ownership Plan (ESOP)A fund containing company stock and owned by employees, paid for by ongoing contributions by the employer. enterprise resource planning (ERP) systema packaged software program that allows a company to Enterprise resource planning systemA computer system used to manage all company Estate PlanningAn insurance program designed to provide funds for insured's dependents upon death of the insured, and to also conserve, as much as possible, the personal assets that the insured wants to bequeath to heirs. Evidence of InsurabilityEvidence submitted to Canada Life that is used to determine whether an individual is eligible for the insurance coverage the individual has applied for. Factory overheadAll the costs incurred during the manufacturing process, minus the 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 First To Die CoverageThis means that there are two or more life insured on the same policy but the death benefit is paid out on the first death only. If two or more persons at the same address are purchasing life insurance at the same time, it is wise to compare the cost of this kind of coverage with individual policies having a multiple policy discount. Fixed asset turnover ratioThe ratio of sales to fixed assets. Fixed Assets Turnover RatioA measure of the utilization of a company's fixed assets to Fixed-charge coverage ratioA measure of a firm's ability to meet its fixed-charge obligations: the ratio of Fixed Charge Coverage RatioA measure of how well a company is able to meet its fixed Fixed overheadThat portion of total overhead costs which remains constant in size fixed overhead spending variancethe difference between the total actual fixed overhead and budgeted fixed overhead; fixed overhead volume variancesee volume variance Floor planningArrangement used to finance inventory. A finance company buys the inventory, which is then Forward coverPurchase or sale of forward foreign currency in order to offset a known future cash flow. Government bondSee: Government securities. Government National Mortgage Association (Ginnie Mae)A wholly owned U.S. government corporation Government securitiesNegotiable U.S. Treasury securities. Government sponsored enterprisesPrivately owned, publicly chartered entities, such as the Student Loan Health Insurance Portability and Accountability Act of 1996 (HIPAA)A federal Act expanding upon many of the insurance reforms created by Hourly Rate PlanA method for calculating wages for hourly employees that involves Insured plansDefined benefit pension plans that are guaranteed by life insurance products. Related: noninsured plans Insured Retirement PlanThis is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today." Interest coverage ratioThe ratio of the earnings before interest and taxes to the annual interest expense. This Interest coverage testA debt limitation that prohibits the issuance of additional long-term debt if the issuer's Interplant transferThe movement of inventory from one company location to Inventory turnoverThe ratio of annual sales to average inventory which measures the speed that inventory INVENTORY TURNOVERThe number of times a company sold out and replaced its average stock of goods in a year. The formula is: Inventory turnoverThe number of times per year that an entire inventory or a Inventory TurnoverRatio of annual sales to inventory, which shows how many times the inventory of a firm is sold and replaced during an accounting period. inventory turnover ratioThe cost-of-goods-sold expense for a given Inventory Turnover RatioProvides a measure of how often a company's inventory is sold or Last To Die CoverageThis means that there are two or more life insured on the same policy but the death benefit is paid out on the last person to die. The cost of this type of coverage is much less than a first to die policy and it is generally used to protect estate value for children where there might be substantial capital gains taxes due upon the death of the last parent. This kind of policy is also valuable when one of two people covered has health problems which would prohibit obtaining individual coverage. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |