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Definition of Cramdown
The ability of the bankruptcy court to confirm a plan of reorganization over the objections of
A retirement plan set up by an employer, into which employees can
A retirement plan similar to a 401k plan, except that it is designed
Schedule of depreciation rates allowed for tax purposes.
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.
The ratio of net credit sales to average accounts receivable, a measure of how
A ratio computed by dividing annual
A budgeting process using summary-level information to
the 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
Categories of assets, such as stocks, bonds, real estate and foreign securities.
Extent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
Also called surplus management, the task of managing funds of a financial
The ratio of net sales to total assets.
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
A broad-gauge ratio computed by dividing annual
Checks deposited by a company that have not yet been cleared.
Checks already deposited that have not yet been cleared.
A plan by U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor
Money owed to the bank in a cheque account where payments exceed receipts.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
Base probability of loss
The probability of not achieving a portfolio expected return.
The requirement that a claim holder voting against a plan of reorganization
A flexible benefits plan authorized under the Internal Revenue
cafeteria plan a “menu” of fringe benefit options that include
cash 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).
Refers to recouping, or regaining, invested capital over
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
The number of cash cycles completed in one year.
he written statement that follows any "trade" in the securities markets. confirmation is issued
An obligation that is dependent on the occurrence or nonoccurrence of
Contingent pension liability
Under ERISA, the firm is liable to the plan participants for up to 39% of the net
Corporate financial planning
Financial planning conducted by a firm that encompasses preparation of both
The purchase of a contract to offset a previously established short position.
Ratios used to test the adequacy of cash flows generated through earnings for purposes of
Coverdell Education IRA
A form of individual retirement account whose earnings
A short call option position in which the writer owns the number of shares of the underlying
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
A put option position in which the option writer also is short the corresponding stock or has
Purchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a
The return at which two alternative projects have the same net present value.
Cumulative probability distribution
A function that shows the probability that the random variable will
This is typically the accounts payable, short-term notes payable, and
Debt-service coverage ratio
Earnings before interest and income taxes plus one-third rental charges, divided
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
Defined benefit plan
A pension plan in which the sponsor agrees to make specified dollar payments to
Defined Benefit Plan
A pension plan that pays out a predetermined dollar
Defined contribution plan
A pension plan in which the sponsor is responsible only for making specified
Defined Contribution Plan
A 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
Inability to work due to injury or sickness.
Insurance 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 immunity
Doctrine that says a nation may not be tried in the courts of another country
Educational Assistance Plan
A 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) system
a packaged software program that allows a company to
Enterprise resource planning system
A computer system used to manage all company
An 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 Insurability
Evidence submitted to Canada Life that is used to determine whether an individual is eligible for the insurance coverage the individual has applied for.
All the costs incurred during the manufacturing process, minus the
A financial blueprint for the financial future of a firm.
The process of evaluating the investing and financing options available to a firm. It
First To Die Coverage
This 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 ratio
The ratio of sales to fixed assets.
Fixed Assets Turnover Ratio
A measure of the utilization of a company's fixed assets to
Fixed-charge coverage ratio
A measure of a firm's ability to meet its fixed-charge obligations: the ratio of
Fixed Charge Coverage Ratio
A measure of how well a company is able to meet its fixed
That portion of total overhead costs which remains constant in size
fixed overhead spending variance
the difference between the total actual fixed overhead and budgeted fixed overhead;
fixed overhead volume variance
see volume variance
Arrangement used to finance inventory. A finance company buys the inventory, which is then
Purchase or sale of forward foreign currency in order to offset a known future cash flow.
See: Government securities.
Government National Mortgage Association (Ginnie Mae)
A wholly owned U.S. government corporation
Negotiable U.S. Treasury securities.
Government sponsored enterprises
Privately 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 Plan
A method for calculating wages for hourly employees that involves
Defined benefit pension plans that are guaranteed by life insurance products. Related: noninsured plans
Insured Retirement Plan
This 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 ratio
The ratio of the earnings before interest and taxes to the annual interest expense. This
Interest coverage test
A debt limitation that prohibits the issuance of additional long-term debt if the issuer's
The movement of inventory from one company location to
The ratio of annual sales to average inventory which measures the speed that inventory
The number of times a company sold out and replaced its average stock of goods in a year. The formula is:
The number of times per year that an entire inventory or a
Ratio 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 ratio
The cost-of-goods-sold expense for a given
Inventory Turnover Ratio
Provides a measure of how often a company's inventory is sold or
Last To Die Coverage
This 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.
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