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Financial Terms | |
Employee Retirement Income Security Act of 1974 (ERISA) |
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Definition of Employee Retirement Income Security Act of 1974 (ERISA)Employee Retirement Income Security Act of 1974 (ERISA)A federal act that sets minimum operational and funding standards for employee benefit
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' Act of state doctrineThis doctrine says that a nation is sovereign within its own borders and its domestic 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. Adjusted Income from ContinuingOperations Reported income from continuing operations 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-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Available-for-Sale SecurityA debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period. Bill and Hold PracticesProducts that have been sold with an explicit agreement that delivery Book IncomePretax income reported on the income statement. Bullet contractA guaranteed investment contract purchased with a single (one-shot) premium. Related: business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay 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–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations 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 common-size income statementincome statement that presents items as a percentage of revenues. Completed-Contract MethodA contract accounting method that recognizes contract revenue 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. Conversion factorsRules set by the Chicago Board of Trade for determining the invoice price of each Convertible securityA security that can be converted into common stock at the option of the security holder, 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 Creative Accounting PracticesAny and all steps used to play the financial numbers game, including critical success factors (CSF)any item (such as quality, customer Current Income Tax ExpenseThat portion of the total income tax provision that is based on 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. Debt SecurityA security representing a debt relationship with an enterprise, including a government Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result Derivative securityA financial security, such as an option, or future, whose value is derived in part from the 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. 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. EmployeeA person who renders services to another entity in exchange for compensation. Employee stock fundA firm-sponsored program that enables employees to purchase shares of the firm's Employee stock ownership plan (ESOP)A company contributes to a trust fund that buys stock on behalf of Employee Stock Ownership Plan (ESOP)a profit-sharing compensation program in which investments are made in Employee Stock Ownership Plan (ESOP)A fund containing company stock and owned by employees, paid for by ongoing contributions by the employer. employee time sheeta source document that indicates, for each employee, what jobs were worked on during the day and for what amount of time Equal Pay Act of 1963A federal act requiring that both sexes receive equal pay Equity SecurityAn ownership interest in an enterprise, including preferred and common stock. Exact matchingA bond portfolio management strategy that involves finding the lowest cost portfolio Exchangeable Securitysecurity that grants the security holder the right to exchange the security for the 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 Factor of ProductionA resource used to produce a good or service. The main macroeconomic factors of production are capital and labor. Factor portfolioA well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of FactoringSale of a firm's accounts receivable to a financial institution known as a factor. FactoringThe sale of accounts receivable to a third party, with the third party bearing FactoringThe discounting, or sale at a discount, of receivables on a nonrecourse, notification Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |