|Dynamic asset allocation|
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Definition of Dynamic asset allocation
Dynamic asset allocation
An asset allocation strategy in which the asset mix is mechanistically shifted in
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Any possession that has value in an exchange.
The ratio of total assets to stockholder equity.
Also called surplus management, the task of managing funds of a financial
Ratios that measure how effectively the firm is managing its assets.
The decision regarding how an institution's funds should be distributed among the
A security that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Categories of assets, such as stocks, bonds, real estate and foreign securities.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
Creditors exchange the debt of one defaulting borrower for the debt of another
A model for determining the required rate of return on an asset.
A firm's investing in assets that are riskier than those that the debtholders expected.
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
Asset pricing model
A model, such as the Capital asset Pricing Model (CAPM), that determines the required
A firm's productive resources.
A common element of a financial plan that describes projected capital spending and the
decision allocation of invested funds between risk-free assets versus the risky portfolio.
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
Value of cash, accounts receivable, inventories, marketable securities and other assets that
A strategy that involves rebalancing hedge positions as market conditions change; a
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Claims on real assets.
Long-lived property owned by a firm that is used by a firm in the production of its income.
Fixed asset turnover ratio
The ratio of sales to fixed assets.
A legal claim to some future benefit, typically a claim to future cash. Goodwill, intellectual
asset that is easily and cheaply turned into cash - notably cash itself and short-term securities.
Value of property, equipment and other capital assets minus the depreciation. This is an
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
Publicly traded assets
assets that can be traded in a public market, such as the stock market.
Current assets minus inventories.
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a
A tangible asset with physical properties that can be reproduced, such as a building or
assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months
Return on total assets
The ratio of earnings available to common stockholders to total assets.
Riskless or risk-free asset
An asset whose future return is known today with certainty. The risk free asset is
An asset whose future return is uncertain.
An asset whose future return is known today with certainty.
Tactical Asset Allocation (TAA)
An asset allocation strategy that allows active departures from the normal
An asset whose value depends on particular physical properties. These i nclude reproducible
Total asset turnover
The ratio of net sales to total assets.
The asset that an option gives the option holder the right to buy or to sell.
An asset which has a limited life and thus, decreases in value (depreciates) over time. Also
Anything of value that a company owns.
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
RATE OF RETURN ON TOTAL ASSETS
The percentage return or profit that management made on each dollar of assets. The formula is:
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
Things that the business owns.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Things that the business owns and are part of the business infrastructure – fixed assets may be
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
The process of spreading production overhead equitably over the volume of production of goods or services.
Tangible fixed assets
Physical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc.
Items owned by the company or expenses that have been paid for but have not been used up.
An offset to an asset account that reduces the balance of the asset account.
assets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises.
asset turnover ratio
A broad-gauge ratio computed by dividing annual
Current refers to cash and those assets that will be turned
An informal term that refers to the variety of long-term operating
return on assets (ROA)
Although there is no single uniform practice for
The amount of total risk that can be eliminated by diversification by
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
Fixed Assets Turnover Ratio
A measure of the utilization of a company's fixed assets to
Return on Total Assets Ratio
A measure of the percentage return earned on the value of the
Total Asset Turnover Ratio
A measure of the utilization of all of a company's assets to
Total Debt to Total Assets Ratio
See debt ratio
the systematic assignment of an amount to a recipient
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
an asset used to generate revenues or cost savings
the assignment, using some reasonable basis,
net realizable value at split-off allocation
a method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary
physical measurement allocation
a method of allocating a joint cost to products that uses a common physical characteristic as the proration base
sales value at split-off allocation
a method of assigning joint cost to joint products that uses the relative sales values of the products at the split-off point as the proration basis; use of this method requires that all joint products
The process of storing costs in one account and shifting them to other
A resource, recorded through a transaction, that is expected to yield a benefit to a
A fixed asset, something that is expected to have long-term usage within
Typically the cash, accounts receivable, and inventory accounts on the
An item with a longevity greater than one year, and which exceeds a company’s
A nonphysical asset with a life greater than one year. Examples are
A cluster of accounts that are listed after fixed assets on the balance sheet,
Any asset that can be converted into cash on short notice. This is a subset
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
Claims to the income generated by real assets. Also called securities.
assets used to produce goods and services.
Something that is owned; a financial claim or a piece of property that is a store of value.
Probable future economic benefit that is obtained or controlled by an entity as a result of
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
Realizable Revenue A revenue transaction where assets received in exchange for goods and
services are readily convertible into known amounts of cash or claims to cash.
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