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Financial Terms | |
Doctrine of sovereign immunity |
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Definition of Doctrine of sovereign immunityDoctrine of sovereign immunitydoctrine that says a nation may not be tried in the courts of another country
Related Terms:Act of state doctrineThis doctrine says that a nation is sovereign within its own borders and its domestic Sovereign riskThe risk that a central bank will impose foreign exchange regulations that will reduce or ActiveA market in which there is much trading. Active portfolio strategyA strategy that uses available information and forecasting techniques to seek a activitya repetitive action performed in fulfillment of business functions activity analysisthe process of detailing the various repetitive actions that are performed in making a product or Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. ![]() activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and Activity-based costingA 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. activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns activity-based management (ABM)a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received activity centera segment of the production or service activity drivera measure of the demands on activities and, Actual costThe actual expenditure made to acquire an asset, which includes the supplierinvoiced ![]() actual cost systema valuation method that uses actual direct ActualsThe physical commodity underlying a futures contract. Cash commodity, physical. ActuaryOne who uses statistical information to evaluate the probability of future events and prices insurance products. ADF (annuity discount factor)the present value of a finite stream of cash flows for every beginning $1 of cash flow. Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Amortization factorThe pool factor implied by the scheduled amortization assuming no prepayemts. Annuity factorPresent value of $1 paid for each of t periods. annuity factorPresent value of an annuity of $1 per period. Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Asset-specific RiskThe amount of total risk that can be eliminated by diversification by Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk. Basis riskThe uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for Beta riskrisk of a firm measured from the standpoint of an investor who holds a highly diversified portfolio. Bill and Hold PracticesProducts that have been sold with an explicit agreement that delivery Bullet contractA guaranteed investment contract purchased with a single (one-shot) premium. Related: Business riskThe risk that the cash flow of an issuer will be impaired because of adverse economic business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay Call riskThe combination of cash flow uncertainty and reinvestment risk introduced by a call provision. cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash Cash Flow Provided by Operating ActivitiesWith some exceptions, the cash effects of transactions Cash Flow Provided or Used from Financing ActivitiesCash receipts and payments involving Cash Flow Provided or Used from Investing ActivitiesCash receipts and payments involving CASH-FLOW STATEMENTA statement that shows where a company’s cash came from and where it went for a period of time, such as a year. Cash Flow statementA financial report that shows the movement in cash for a business during an accounting period. CASH FLOWS FROM FINANCING ACTIVITIESA section on the cash-flow statement that shows how much cash a company raised by selling stocks or bonds this year and how much was paid out for cash dividends and other finance-related obligations. CASH FLOWS FROM INVESTING ACTIVITIESA section on the cashflow statement that shows how much cash came in and went out because of various investing activities like purchasing machinery. Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Cash transactionA transaction where exchange is immediate, as contrasted to a forward contract, which Characteristic lineThe market model applied to a single security. The slope of the line is a security's beta. Collection fractionsThe percentage of a given month's sales collected during the month of sale and each Commercial riskThe risk that a foreign debtor will be unable to pay its debts because of business events, common-size income statementIncome statement that presents items as a percentage of revenues. Company-specific riskRelated: Unsystematic risk Companyspecific RiskSee asset-specific risk Completed-Contract MethodA contract accounting method that recognizes contract revenue Completion riskThe risk that a project will not be brought into operation successfully. computer-aided manufacturing (CAM)the use of computers to control production processes through numerically computer integrated manufacturing (CIM)the integration of two or more flexible manufacturing systems through the use of a host computer and an information networking system Conditional sales contractsSimilar to equipment trust certificates except that the lender is either the Consolidated Omnibus Budget Reconciliation Act (COBRA)A federal act Consumer Credit Protection ActA federal act specifying the proportion of ContractA term of reference describing a unit of trading for a financial or commodity future. Also, the actual ContractA formal written statement of the rights and obligations of each party to a transaction. Contract AccountingMethod of accounting for sales or service agreements where completion contract manufactureran external party that has been granted an outsourcing contract to produce a part or component for an entity Contract monthThe month in which futures contracts may be satisfied by making or accepting a delivery. contract vendoran external party that has been granted an Contract Work Hours and Safety Standards ActA federal act requiring federal contractors to pay overtime for hours worked exceeding 40 per week. Convention statementAn annual statement filed by a life insurance company in each state where it does Conversion factorsRules set by the Chicago Board of Trade for determining the invoice price of each cost of goods manufactured (CGM)the total cost of the Cost of manufactureThe cost of goods manufactured for subsequent sale. cost-plus contracta contract in which the customer agrees Counterparty riskThe risk that the other party to an agreement will default. In an options contract, the risk Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Country risk GeneralLevel of political and economic uncertainty in a country affecting the value of loans or Creative Accounting PracticesAny and all steps used to play the financial numbers game, including Credit riskThe risk that an issuer of debt securities or a borrower may default on his obligations, or that the Credit RiskFinancial and moral risk that an obligation will not be paid and a loss will result. critical success factors (CSF)any item (such as quality, customer Cross-border riskRefers to the volatility of returns on international investments caused by events associated Currency riskRelated: Exchange rate risk Currency risk sharingAn agreement by the parties to a transaction to share the currency risk associated with Current Tax Payment Act of 1943A federal act requiring employers to withhold income taxes from employee pay. Davis-Bacon Act of 1931A federal act providing wage protection to nongovernment De factoExisting in actual fact although not by official recognition. Default riskAlso referred to as credit risk (as gauged by commercial rating companies), the risk that an 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 Discount factorPresent value of $1 received at a stated future date. discount factorPresent value of a $1 future payment. Diversifiable riskRelated: unsystematic risk. Economic riskIn project financing, the risk that the project's output will not be salable at a price that will Employee Retirement Income Security Act of 1974 (ERISA)A federal act that sets minimum operational and funding standards for employee benefit Equal Pay Act of 1963A federal act requiring that both sexes receive equal pay Equilibrium market price of riskThe slope of the capital market line (CML). Since the CML represents the 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. Event riskThe risk that the ability of an issuer to make interest and principal payments will change because Exact matchingA bond portfolio management strategy that involves finding the lowest cost portfolio Exchange rate riskAlso called currency risk, the risk of an investment's value changing because of currency Exchange riskThe variability of a firm's value that results from unexpected exchange rate changes or the External Financial StatementsCorporate financial statements that have been reported on by an external independent accountant. FactorA financial institution that buys a firm's accounts receivables and collects the debt. FactorAn agent who buys and sells goods on behalf of others for a commission. Factor analysisA statistical procedure that seeks to explain a certain phenomenon, such as the return on a Factor modelA way of decomposing the factors that influence a security's rate of return into common and Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |