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Definition of Debt instrument
An asset requiring fixed dollar payments, such as a government or corporate bond.
Any financial asset corresponding to a debt, such as a bond or a treasury bill.
A long-term debt instrument in which the issuer (borrower) is
The market for trading long-term debt instruments (those that mature in more than one year).
Are debt instruments that are convertible into common or preferred shares, take secondary or no security against assets, have flexible terms of repayment and charge fixed or floating interest rates.
The blended cost of a company’s currently outstanding debt instruments
Current time to maturity on an outstanding debt instrument.
The market for trading debt instruments.
Short- to medium-term debt instrument sold in the Eurocurrency market.
The nominal value which appears on the face of a document recording an entitlement, generally an amount of money that has to be repaid on the maturity of a debt instrument.
See debt instrument.
A corporate debt instrument that is continuously offered to investors over a period of
A financial market in which short-term (maturity of less than a year) debt instruments such as bonds are traded.
debt instrument by which the borrower (mortgagor) gives the lender (mortgagee) a lien on property as security for the repayment of a loan.
debt instruments with initial maturities greater than one year and less than 10 years.
The obligation due under a debt instrument exclusive of interest.
Are debt instruments that provide financing, take primary security against either specific or all assets of the borrower, have fixed terms of repayment and charge fixed or floating interest rates.
debt instruments that provide financing for acquisitions, expansion and restructuring, take secondary security against assets, have fixed or flexible terms of repayment and charge fixed or floating interest rates.
Allowance for bad debts
An offset to the accounts receivable balance, against which
Alternative mortgage instruments
Variations of mortgage instruments such as adjustable-rate and variablerate
An account receivable that cannot be collected.
The amount of accounts receivable that is not expected to be collected.
Refers to accounts receivable from credit sales to customers
Cost of Debt
The cost of debt (bonds, loans, etc.) that a company is charged for
Borrowings from financiers.
Funds owed to another entity.
Ability to borrow. The amount a firm can borrow up to the point where the firm value no
An assessment of ability and willingness to repay a loan from anticipated future cash flow or other sources.
Debt (Credit Insurance)
Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. debt may or may not be secured.
The amount of borrowing that leasing displaces. Firms that do a lot of leasing will be
Indicator of financial leverage. Compares assets provided by creditors to assets provided
A comparison of debt to equity in a company's capital structure.
Raising loan capital through the creation of debt by issuing a form of paper evidencing amounts owed and payable on specified dates or on demand.
The amplification of the return earned on equity when an investment or firm is financed
A bond covenant that restricts in some way the firm's ability to incur additional indebtedness.
Total debt divided by total assets.
The percentage of debt that is used in the total capitalization of a
Reducing the principal and/or interest payments on LDC loans.
IOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and
A security representing a debt relationship with an enterprise, including a government
Interest payment plus repayments of principal to creditors, that is, retirement of debt.
Debt-service coverage ratio
Earnings before interest and income taxes plus one-third rental charges, divided
Debt service parity approach
An analysis wherein the alternatives under consideration will provide the firm
A set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank
A widely used financial statement ratio to assess the
Debtor in possession
A firm that is continuing to operate under Chapter 11 bankruptcy process.
New debt obtained by a firm during the Chapter 11 bankruptcy process.
Sales to customers who have bought goods or services on credit but who have not yet paid their debt.
The asset in a forward contract that will be delivered in the future at an agree-upon price.
Contracts such as options and futures whose price is derived from the price of the
This is a generic term that refers to the many different forms of financing a business may use. For example - loans, shares, and bonds are all considered financing instruments.
Firm's net value of debt
Total firm value minus total firm debt.
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
debt maturing after more than one year.
debt with more than 1 year remaining to maturity.
Financial securities, such as money market instruments or capital market insturments.
Interest rate on debt
The firm's cost of debt capital.
Junior debt (subordinate debt)
debt whose holders have a claim on the firm's assets only after senior
A security, such as a call option, in which the owner can only lose his initial
A security, such as a call option, in which the owner can only lose his initial investment.
An obligation having a maturity of more than one year from the date it was issued. Also
A debt for which payments will be required for a period of more than
Long Term Debt
Liability due in a year or more.
Indicator of financial leverage. Shows long-term debt as a proportion of the
Long-term debt ratio
The ratio of long-term debt to total capitalization.
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
Refers to non-conventional debt that has a greater element of risk than secured debt but has less risk than equity.
MM's proposition I (debt irrelevance proposition)
The value of a firm is unaffected by its capital structure.
Monetizing the Debt
See printing money.
The debt owed by the government as a result of earlier borrowing to finance budget deficits. That part of the debt not held by the central bank is the publically held national debt.
Original issue discount debt (OID debt)
debt that is initially offered at a price below par.
See national debt.
Publicly Held National Debt
See national debt.
RATIO OF DEBT TO STOCKHOLDERS’ EQUITY
A ratio that shows which group—creditors or stockholders—has the biggest stake in or the most control of a company:
debt that, in the event of default, has first claim on specified assets.
debt that has first claim on specified collateral in the event of default.
debt that, in the event of bankruptcy, must be repaid before subordinated debt receives any payment.
debt that has been customized for the buyer, often by incorporating unusual options.
debt over which senior debt takes priority. In the event of bankruptcy, subordinated
debt that may be repaid in bankruptcy only after senior debt is paid.
Total debt to equity ratio
A capitalization ratio comparing current liabilities plus long-term debt to
Total Debt to Total Assets Ratio
See debt ratio
debt maturing within one year (short-term debt). See: funded debt.
debt that does not identify specific assets that can be taken over by the debtholder in case of default.
capital structure, or capitalization
Terms that refer to the combination of
The risk that an issuer of debt securities or a borrower may default on his obligations, or that the
A method for hedging price risk that utilizes debt-market instruments, such as interest rate
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