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Financial Terms | |
Dissaving |
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Definition of DissavingDissavingNegative saving, a situation in which spending exceeds disposable income.
Related Terms:Accrued Incomeincome that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment. Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' Adjusted Income from ContinuingOperations Reported income from continuing operations Book IncomePretax income reported on the income statement. Canada Savings BondsA bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value. Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations common-size income statementincome statement that presents items as a percentage of revenues. ![]() Current Income Tax ExpenseThat portion of the total income tax provision that is based on Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result Disposable Incomeincome less income tax. Dividend incomeincome that a company receives in the form of dividends on stock in other companies that it holds. earned incomeEarned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits. earnings before interest and income tax (EBIT)A measure of profit that Economic incomeCash flow plus change in present value. Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Fixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight ![]() Fixed-income instrumentsAssets that pay a fixed-dollar amount, such as bonds and preferred stock. Fixed-income marketThe market for trading bonds and preferred stock. Fixed-income securityA security that pays a specified cash flow over a fixed overhead spending variancethe difference between the total actual fixed overhead and budgeted fixed overhead; Flexible Spending AccountA form of cafeteria plan allowing employees to pay IncomeNet earnings after all expenses for an accounting period are subtracted from all Income beneficiaryOne who receives income from a trust. Income bondA bond on which the payment of interest is contingent on sufficient earnings. These bonds are Income from Continuing OperationsAfter-tax net income before discontinued operations, Income fundA mutual fund providing for liberal current income from investments. income fundsMutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares. ![]() Income SmoothingA form of earnings management designed to remove peaks and valleys Income SplittingThis is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs. INCOME STATEMENTAn accounting statement that summarizes information about a company in the following format: Income StatementOne of the basic financial statements; it lists the revenue and expense accounts of the company. income statementFinancial statement that summarizes sales revenue Income statementA financial report that summarizes a company’s revenue, cost of income statementFinancial statement that shows the revenues, expenses, and net income of a firm over a period of time. Income statement (statement of operations)A statement showing the revenues, expenses, and income (the Income StatementsA financial statement that displays a breakdown of total sales and total expenses. Income stockCommon stock with a high dividend yield and few profitable investment opportunities. INCOME TAXWhat the business paid to the IRS. Income taxA government tax on the income earned by an individual or corporation. Income Tax ExpenseSee income tax provision. Income Tax ProvisionThe expense deduction from pretax book income reported on the Incomes PolicyA policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example. Interest incomeincome that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies. Investment incomeThe revenue from a portfolio of invested assets. Investment SpendingExpenditures on capital goods including new housing. Financial ''investments" and sales of existing assets are not included. Life Income FundCommonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80. Monthly income preferred security (MIP)Preferred stock issued by a subsidiary located in a tax haven. National IncomeGDP with some adjustments to remove items that do not make it into anyone's hands as income, such as indirect taxes and depreciation. Loosely speaking, it is interpreted as being equal to GDP. National Income and Product AccountsThe national accounting system that records economic activity such as GDP and related measures. National SavingPrivate saving plus public saving. That part of national income which is not spent on consumption goods or government spending. Negative amortizationA loan repayment schedule in which the outstanding principal balance of the loan Negative carryRelated: net financing cost negative cash flowThe cash flow from the operating activities of a business Negative convexityA bond characteristic such that the price appreciation will be less than the price Negative covenantA bond covenant that limits or prohibits altogether certain actions unless the bondholders agree. Negative durationA situation in which the price of the MBS moves in the same direction as interest rates. Negative goodwillA term used to describe a situation in which a business combination Negative Loan CovenantsLoan covenants designed to limit a corporate borrower's behavior Negative pledge clauseA bond covenant that requires the borrower to grant lenders a lien equivalent to any Net incomeThe company's total earnings, reflecting revenues adjusted for costs of doing business, NET INCOMEThe profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales. Net incomeThe last line of the income Statement; it represents the amount that the company earned during a specified period. Net incomeThe excess of revenues over expenses, including the impact of income taxes. net income (also called the bottom line, earnings, net earnings, and netoperating earnings) Operating incomeThe net income of a business, less the impact of any financial activity, Operating IncomeA measure of results produced by the core operations of a firm. It is common overhead spending variancethe difference between total actual overhead and total budgeted overhead at actual Permanent Income HypothesisTheory that individuals base current consumption spending on their perceived long-run average income rather than their current income. Private SavingThat part of disposable income not spent on consumption. RATIO OF NET INCOME TO NET SALESA ratio that shows how much net income (profit) a company made on each dollar of net sales. Here’s the formula: RATIO OF NET SALES TO NET INCOMEA ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way: Real Incomeincome expressed in base-year dollars, calculated by dividing nominal income by a price index. Registered Retirement Income Fund (Canada)Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income. Registered Retirement Savings Plan (Canada)Commonly referred to as an RRSP, this is a tax sheltered and tax deferred savings plan recognized by the Federal and Provincial tax authorities, whereby deposits are fully tax deductable in the year of deposit and fully taxable in the year of receipt. The ability to defer taxes on RRSP earnings allows one to save much faster than is ordinarily possible. The new rules which apply to RRSP's are that the holder of such a plan must convert it into income by the end of the year in which the holder turns age 69. The choices for conversion are to simply cash it in an pay full tax in the year of receipt, convert it to a RRIF and take a varying stream of income, paying tax on the amount received annually until the income is exhausted, or converting it into an annuity with guaranteed payments for a chosen number of years, again paying tax each year on moneys received. residual incomethe profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center residual incomeAlso called economic value added. Profit minus cost of capital employed. Residual income (RI)The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business. RRSP (Registered Retirement Savings Plan) (Canada)A savings plan registered with Revenue Canada, which allows you to set aside a portion of your earned income now for use in the future. When you contribute to your RRSP, you are eligible to claim a tax deduction. However, cashing RRSPs at a later date will result in the payment of tax. Savings and Loan associationNational- or state-chartered institution that accepts savings deposits and Savings depositsAccounts that pay interest, typically at below-market interest rates, that do not have a savings fundsMutual funds that seek to preserve capital. This type of fund invests primarily in short-term securities with an average term to maturity of one year or less, or in the case of money market funds, 90 days or less. Savings Incentive Match Plan for Employees (SIMPLE)An IRA set up by an employer with no other retirement plan and employing fewer than 100 employees, Spousal Registered Retirement Savings PlanThis is an RRSP owned by the spouse of the person contributing to it. The contributor can direct up to 100% of eligible RRSP deposits into a spousal RRSP each and every year. Contributing to a spouses RRSP reduces the amount one can contribute to one's own RRSP, however, if the spouse is a lower income earner, it is an excellent way in which to split income for lower taxation in retirement years. Spread incomeAlso called margin income, the difference between income and cost. For a depository tax-deferred incomecurrent compensation that is taxed at a future date tax-exempt incomecurrent compensation that is never taxed Tax-Related Incomes Policy (TIP)Tax incentives for labor and business to induce them to conform to wage/price guidelines. Taxable incomeGross income less a set of deductions. Taxable Incomeincome subject to income tax as reported on the tax return. Underwriting incomeFor an insurance company, the difference between the premiums earned and the costs variable overhead spending variancethe difference between total actual variable overhead and the budgeted amount of variable overhead based on actual input activity Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |