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Definition of Endogenous
Determined from within the system. Opposite of exogenous.
A value determined within the context of a model.
A value determined within the context of a model. Also called endogenous variable.
Schedule of depreciation rates allowed for tax purposes.
The sum of all the interest options in your policy, including interest.
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
An amount of money invested plus the interest earned on that money.
The sum of cash, accounts receivable, and short-term marketable
a valuation method that uses actual direct
The net present value analysis of an asset if financed solely by equity
a method of allocating joint cost to joint products using a
Yield curve option-pricing models.
A model for determining the required rate of return on an asset.
A model, such as the Capital Asset Pricing model (CAPM), that determines the required
A racking system using automated systems
The amount of cash payable on a benefit.
A method of pricing options or other equity derivatives in
Binomial option pricing model
An option pricing model in which the underlying asset can take on only two
The first complete mathematical model for pricing
Black-Scholes option-pricing model
A model for pricing call options based on arbitrage arguments that uses
With respect to convertible bonds, the value the security would have if it were not convertible
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
An asset’s cost basis minus accumulated depreciation.
The value of an asset as carried on the balance sheet of a
An asset’s original cost, less any depreciation that has been subsequently incurred.
Net worth of the firm’s assets or liabilities according
book value and book value per share
Generally speaking, these terms
BOOK VALUE OF COMMON STOCK
The theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals:
Book value per share
The ratio of stockholder equity to the average number of common shares. Book value
Book Value per Share
The book value of a company divided by the number of shares
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
an activity that is necessary for the operation of the business but for which a customer would not want to pay
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
CAPITAL IN EXCESS OF PAR VALUE
What a company collected when it sold stock for more than the par value per share.
An amount the insurance company will pay if the policyholder ends a whole life
Cash Surrender Value
This is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications.
Cash Surrender Value
Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.
Cash value added (CVA)
A method of investment appraisal that calculates the ratio of the net present value of an
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
constant-growth dividend discount model
Version of the dividend discount model in which dividends grow at a constant rate.
Also called the Gordon-Shapiro model, an application of the dividend discount
Continuous random variable
A random value that can take any fractional value within specified ranges, as
Also called parity value, the value of a convertible security if it is converted immediately.
cost control system
a logical structure of formal and/or informal
cost management system (CMS)
a set of formal methods
an unknown item for which a linear programming
an unknown variable that is to be predicted
Liability-matching models that assume that the liability payments and the asset cash
Discounted dividend model (DDM)
A formula to estimate the intrinsic value of a firm by figuring the
Discrete random variable
A random variable that can take only a certain specified set of discrete possible
dividend discount model
Computation of today’s stock price which states that share value equals the present value of all expected future dividends.
Dividend discount model (DDM)
A model for valuing the common stock of a company, based on the
Dividend growth model
A model wherein dividends are assumed to be at a constant rate in perpetuity.
Du Pont system
A breakdown of ROE and ROA into component ratios.
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
economic components model
Abrams’ model for calculating DLOM based on the interaction of discounts from four economic components.
Economic Value Added (EVA)
Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge
economic value added (EVA)
a measure of the extent to which income exceeds the dollar cost of capital; calculated
economic value added (EVA)
Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
enterprise resource planning (ERP) system
a packaged software program that allows a company to
Enterprise resource planning system
A computer system used to manage all company
European Monetary System (EMS)
An exchange arrangement formed in 1979 that involves the currencies
The amount of advantage over a current market transaction provided by an in-the-money
The value that an asset is expected to have at the time it is sold at a predetermined
An adjective indicating that something is determined by forces unrelated to the theory determining the variables under investigation.
See autonomous expenditure.
A variable whose value is determined outside the model in which it is used. Also called
The weighted average of a probability distribution.
The value of the possible outcomes of a variable weighted by the
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Extraordinary positive value
A positive net present value.
Extrapolative statistical models
models that apply a formula to historical data and project results for a
See: Par value.
The nominal value of a security. Also called the par value.
The maturity value of a security. Also known as par value,
Payment at the maturity of the bond. Also called par value or maturity value.
The payoff value of a bond upon maturity. Also called par value. See principal.
The nominal value which appears on the face of a document recording an entitlement, generally an amount of money that has to be repaid on the maturity of a debt instrument.
A way of decomposing the factors that influence a security's rate of return into common and
Fair market value
The price that an asset or service will fetch on the open market.
Fair Market Value
The highest price available, expressed in terms of cash, in an open and unrestricted market between informed, prudent parties acting at arm's length and under no compulsion to transact.
The amount at which an asset could be purchased or sold or a liability incurred or
Federal Reserve System
The central bank of the U.S., established in 1913, and governed by the Federal
Federal Reserve System
The central banking authority responsible for monetary policy in the United States.
Firm's net value of debt
Total firm value minus total firm debt.
Flat price (also clean price)
The quoted newspaper price of a bond that does not include accrued interest.
flexible manufacturing system (FMS)
a production system in which a single factory manufactures numerous variations
The amount of cash at a specified date in the future that is equivalent in value to a specified
The amount a given payment, or series of payments, will be worth
the amount to which one or more sums of
The value that a sum of money (the present value) earning
Amount to which an investment will grow after earning interest.
The amount to which a payment or series of payments will grow by a given future date when compounded by a given interest rate. FVIF future value interest factor.
Garmen-Kohlhagen option pricing model
A widely used model for pricing foreign currency options.
present value of a perpetuity with growth.
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