|Effective margin (EM)|
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Definition of Effective margin (EM)
Effective margin (EM)
Used with SAT performance measures, the amount equaling the net earned spread, or
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
A characterization used by the Securities and Exchange
Schedule of depreciation rates allowed for tax purposes.
Coverage that provides a lump-sum payment to you or your survivors if an accident results in the loss of a limb, paralysis or your death.
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
a valuation method that uses actual direct
The ratio of net income to net sales.
Conflicts of interest among stockholders, bondholders, and managers.
Conflicts of interest between the firm’s owners and managers.
Total quantity of goods and services demanded.
Combinations of the price level and income for which the goods and services market is in equilibrium, or for which both the goods and services market and the money market are in equilibrium.
Date on which particular news concerning a given company is announced to the public.
Yearly amount payable by a client for a policy or component.
Also called surplus management, the task of managing funds of a financial
Asset substitution problem
Arises when the stockholders substitute riskier assets for the firm's existing
A common element of a financial plan that describes projected capital spending and the
Automated storage/retrieval system
A racking system using automated systems
Automatic Waiver of Premium
A benefit that automatically forfeits premium payments.
Variable that adjusts to maintain the consistency
Bank for International Settlements (BIS)
An international bank headquartered in Basel, Switzerland, which
Before-tax profit margin
The ratio of net income before taxes to net sales.
Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees
A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
A contract for privately placed debt.
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
Bretton Woods Agreement
An agreement signed by the original United Nations members in 1944 that
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
Buy on margin
A transaction in which an investor borrows to buy additional shares, using the shares
This is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon death or disability. Life insurance, critical illness coverage and disability insurance are major considerations to help fund this type of agreement.
The total of debt and equity, i.e. the total funds in the business.
Cash deficiency agreement
An agreement to invest cash in a project to the extent required to cover any cash
Temporary investments of currently excess cash in short-term, high-quality
A 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 statement
A financial report that shows the movement in cash for a business during an accounting period.
Cash management bill
Very short maturity bills that the Treasury occasionally sells because its cash
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
Certified Management Accountant (CMA)
a professional designation in the area of management accounting that
a system using transfer prices; see transfer
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
A member firm of a clearing house. Each clearing member must also be a member of the
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s Performance Presentation Standards Implementation
common-size income statement
Income statement that presents items as a percentage of revenues.
Policies which enhance each other.
An understanding between a company and the host government that specifies the
Conditional Sale Agreement
An agreement entered into between a conditional buyer and a conditional seller setting out the terms under which goods change hands.
A legal document whereby the one party, usually the prospective investor, pledges to keep strictly confidential, and return on request, any and all information provided by the entrepreneur seeking funding.
an ongoing process of enhancing employee task performance, level of product quality, and level of company service through eliminating nonvalue-added activities to reduce lead time, making products
The difference between variable revenue and variable cost.
An intermediate measure of profit equal to sales revenue
the difference between selling price and
The margin that results when variable production costs are subtracted
contribution margin ratio
the proportion of each revenue dollar remaining after variable costs have been covered;
the additional value inherent in the control interest as contrasted to a minority interest, which reflects its power of control
A service that provides for a single presentation of checks each day (typically in
An annual statement filed by a life insurance company in each state where it does
The percentage by which the conversion price in a convertible security exceeds the
Corporate financial management
The application of financial principals within a corporation to create and
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
cost control system
a logical structure of formal and/or informal
cost management system (CMS)
a set of formal methods
In the balance of payments, counterpart items are analogous to unrequited transfers in the
Purchase of the financial guarantee of a large insurance company to raise funds.
A record of the funds which have been credited to your account.
Unemployment that increases when the economy enters a recession and decreases when the economy enters a boom.
A record of the funds which have been debited from your account.
The amount of borrowing that leasing displaces. Firms that do a lot of leasing will be
Under certain circumstances, taxation rules assume that a transfer of property has occurred, even though there has not been an actual purchase or sale. This could happen upon death or transfer of ownership.
A differential in promised yield that compensates the investor for the risk inherent in
Difference in promised yields between a default-free bond and a riskier bond.
An amount desired, in the sense that people are willing and able to pay to obtain this amount. Always associated with a given price.
A bank deposit that can be withdrawn on demand, such as a deposit in a checking account.
Checking accounts that pay no interest and can be withdrawn upon demand.
Demand line of credit
A bank line of credit that enables a customer to borrow on a daily or on-demand basis.
A loan which must be repaid in full on demand.
Demand Management Policy
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
Demand master notes
Short-term securities that are repayable immediately upon the holder's demand.
Inflation whose initial cause is excess demand rather than cost increases. See also cost-push inflation.
An event that affects the demand for goods in services in the economy.
Selling a new issue not by offering it for sale publicly, but by placing it with one of several
A decrease in book cash but no immediate change in bank cash, generated by checks
Division of Enforcement
A department within the Securities and Exchange Commission that
Dollar safety margin
The dollar equivalent of the safety cushion for a portfolio in a contingent immunization
Agreement between two countries that taxes paid abroad can be offset against
Du Pont system
A breakdown of ROE and ROA into component ratios.
dual pricing arrangement
a transfer pricing system that allows
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
The active manipulation of earnings toward a predetermined target.
EBITDA divided by total sales or total revenue.
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
effective annual interest rate
Interest rate that is annualized using compound interest.
Effective annual yield
Annualized interest rate on a security computed using compound interest techniques.
Effective Annual Yield
Annualized rate of return on a security computed using compound
Effective call price
The strike price in an optional redemption provision plus the accrued interest to the
The convexity of a bond calculated with cash flows that change with yields.
In an interest rate swap, the date the swap begins accruing interest.
The duration calculated using the approximate duration formula for a bond with an
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