|Dupont system of financial control
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Definition of Dupont system of financial control
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
the additional value inherent in the control interest as contrasted to a minority interest, which reflects its power of control
an amount or percentage deducted from a pro rata share of the value of 100% of an equity interest in a business, to reflect the absence of some or all of the powers of control.
Schedule of depreciation rates allowed for tax purposes.
Sources of funds internally provided from operations that alter a company's
A computerized clearing system for sterling funds
An international wire transfer system for high-value
50% of the outstanding votes plus one vote.
A service that provides for a single presentation of checks each day (typically in
A foreign corporation whose voting stock is more than 50% owned
The corporate manager responsible for the firm's accounting activities.
The application of financial principals within a corporation to create and
financial planning conducted by a firm that encompasses preparation of both
The ability of the national economy to generate enough foreign exchange to meet
An exchange arrangement formed in 1979 that involves the currencies
Governmental restrictions on the purchase of foreign currencies by domestic citizens or
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the Federal
Also called securities analysts and investment analysts, professionals who analyze
Claims on real assets.
The management of a firm's costs and expenses in order to control them in relation to
Events preceding and including bankruptcy, such as violation of loan contracts.
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
Combining or dividing existing instruments to create new financial products.
A contract entered into now that provides for the delivery of a specified asset in exchange
Institutions that provide the market function of matching borrowers and lenders or
Long-term, non-cancelable lease.
Use of debt to increase the expected return on equity. financial leverage is measured by
Financial leverage clientele
A group of investors who have a preference for investing in firms that adhere to
Financial leverage ratios
Related: capitalization ratios.
An organized institutional structure or mechanism for creating and exchanging financial assets.
Objectives of a financial nature that the firm will strive to accomplish during the period
A financial blueprint for the financial future of a firm.
The process of evaluating the investing and financing options available to a firm. It
That portion of the media devoted to reporting financial news.
The result of dividing one financial statement item by another. Ratios help analysts interpret
The risk that the cash flow of an issuer will not be adequate to meet its financial obligations.
Foreign exchange controls
Various forms of controls imposed by a government on the purchase/sale of
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
Just-in-time inventory systems
systems that schedule materials/inventory to arrive exactly as they are
London International Financial Futures Exchange (LIFFE)
A London exchange where Eurodollar futures
Long-term financial plan
financial plan covering two or more years of future operations.
London International Financial Futures Exchange (LIFFE)
London exchange where Eurodollar futures as well as futures-style options are traded.
A technical trading strategy that combines mechanical rules, such as the CRISMA
Include such things as freight, insurance, passenger services, and travel.
Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also
Notes to the financial statements
A detailed set of notes immediately following the financial statements in
Perfectly competitive financial markets
Markets in which no trader has the power to change the price of
Pro forma financial statements
financial statements as adjusted to reflect a projected or planned transaction.
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
Risk controlled arbitrage
A self-funding, self-hedged series of transactions that generally utilize mortgage
Short-term financial plan
A financial plan that covers the coming fiscal year.
Society for Worldwide Interbank Financial Telecommunications (SWIFT)
A dedicated computer network to support funds transfer messages internationally between over 900 member banks worldwide.
Split-rate tax system
A tax system that taxes retained earnings at a higher rate than earnings that are
Statement of Financial Accounting Standards No. 8
This is a currency translation standard previously in
Statement of Financial Accounting Standards No. 52
This is the currency translation standard currently
Common to all businesses.
Also called undiversifiable risk or market risk, the minimum level of risk that can be
Systematic risk principle
Only the systematic portion of risk matters in large, well-diversified portfolios.
Two-tier tax system
A method of taxation in which the income going to shareholders is taxed twice.
Also called the diversifiable risk or residual risk. The risk that is unique to a company
MACRS (Modified Accelerated Cost Recovery System)
A depreciation method created by the IRS under the Tax Reform Act of 1986. Companies must use it to depreciate all plant and equipment assets installed after December 31, 1986 (for tax purposes).
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
The process of ensuring that actual financial results are in line with targets â€“ see variance
The profit made by a division after deducting only those expenses that can be controlled by the
The process of either reducing costs while maintaining the same level of productivity or maintaining costs while increasing productivity.
The production of financial statements, primarily for those interested parties who are external to the business.
Financial reports or statements
The Profit and Loss account, Balance Sheet and Cash Flow statement of a business.
The accounting period adopted by a business for the production of its financial statements.
Planning, programming and budgeting system (PPBS)
A method of budgeting in which budgets are allocated to projects or programmes rather than to responsibility centres.
An account maintained in the general ledger that holds the balance without the detail. The detail is maintained in a subsidiary ledger.
Periodic inventory system
An inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period.
Perpetual inventory system
An inventory system in which the balance in the Inventory account is adjusted for the units sold each time a sale is made.
statement of financial condition
See balance sheet.
The equity (ownership) capital of a business can serve
financial reports and statements
financial means having to do with
internal accounting controls
Refers to forms used and procedures
This is difficult to define in a few wordsâ€”indeed, an
The amount of total risk that cannot be eliminated by portfolio
The amount of total risk that can be eliminated by diversification by
actual cost system
a valuation method that uses actual direct
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
a system using transfer prices; see transfer
a graphical presentation of the results of a
a cost over which a manager has the ability to authorize incurrence or directly influence magnitude
the budget variance of the two variance approach to analyzing overhead variances
the chief accountant (in a corporation) who is responsible
the process of exerting managerial influence on
cost control system
a logical structure of formal and/or informal
cost management system (CMS)
a set of formal methods
enterprise resource planning (ERP) system
a packaged software program that allows a company to
a discipline in which historical, monetary
a plan that aggregates monetary details
a monetary reward provided for performance
flexible manufacturing system (FMS)
a production system in which a single factory manufactures numerous variations
hybrid costing system
a costing system combining characteristics
any measure used by management to protect
job order costing system
a system of product costing used
just-in-time manufacturing system
a production system that attempts to acquire components and produce inventory only as needed, to minimize product defects, and to
management control system (MCS)
an information system that helps managers gather information about actual organizational occurrences, make comparisons against plans,
management information system (MIS)
a structure of interrelated elements that collects, organizes, and communicates
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