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Definition of Finance
A discipline concerned with determining value and making decisions. The finance function allocates
One of the three areas of the discipline of finance. It deals with the operation of the firm
finance that is not generated by the firm: new borrowing or a stock issue.
Company engaged in making loans to individuals or businesses. Unlike a bank, it does not receive deposits from the public.
finance generated within a firm by retained earnings and depreciation.
A subsidiary incorporated in the U.S., usually in Delaware, whose sole
A wholly owned affiliate incorporated overseas, usually in a tax haven country,
The net present value analysis of an asset if financed solely by equity
Loans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender.
The multiplier associated with a change in government spending financed by an equal change in taxes.
The argument that expected bankruptcy costs preclude firms from being financed entirely
Also called the broker loan rate , the interest rate that banks charge brokers to finance
In finance: to find the present value of a stream of cash flows.
a measure used in academic finance articles to measure the excess returns an investor would have received over a particular time period if he or she were invested in a particular stock.
Purchase of a security and simultaneous sale of a future, with the balance being financed
A 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.
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
The amplification of the return earned on equity when an investment or firm is financed
A bond portfolio management strategy that involves finding the lowest cost portfolio
Arrangement used to finance inventory. A finance company buys the inventory, which is then
Force majeure risk
The risk that there will be an interruption of operations for a prolonged period after a
This is a telephone interview of the person applying for life insurance conducted by someone from the underwriting department of the insurance company. Some insurance companies only sporadically contact applicants and some contact every applicant. On average the interview lasts between 15 to 30 minutes. The questions asked relate to personal habits (like smoking and alcohol consumption) and finances, including income and net worth, confirmation of employment, duties and the nature of the applicant's business. In addition, there are questions about driving, sports, aviation and currently held insurance. All information obtained is strictly confidential and is submitted solely to the underwriter for review.
The number of days that a firm can finance operations without additional cash income.
Irrational call option
The implied call imbedded in the MBS. Identified as irrational because the call is
Leveraged buyout (LBO)
A transaction used for taking a public corporation private financed through the use
Leveraged required return
The required return on an investment when the investment is financed partially by debt.
The debt owed by the government as a result of earlier borrowing to finance budget deficits. That part of the debt not held by the central bank is the publically held national debt.
Factoring arrangement that provides collection, insurance, and finance for accounts receivable.
The profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation.
pecking order theory
Firms prefer to issue debt rather than equity if internal finance is insufficient.
Debt finance, usually non-recourse, provided by financial institutions for the development and construction of a new project.
Project notes (PNs)
Project notes are issued by municipalities to finance federally sponsored programs in
The process of using financial ratios, calculated from key accounts
A bond issued by a municipality to finance either a project or an enterprise where the issuer
A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.
Loan to finance current assets, The sale of the current assets provides the cash to repay
Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as
Staff Accounting Bulletin (SAB)
Interpretations and practices followed by the staff of the Office of the Chief Accountant and the Division of Corporation finance in administering the disclosure
Bank borrowing facility to provide finance while the firm replaces U.S. commercial paper
TANs (tax anticipation notes)
Tax anticipation notes issued by states or municipalities to finance current
Threshold for refinancing
The point when the WAC of an MBS is at a level to induce homeowners to
Mutual Funds: A measure of trading activity during the previous year, expressed as a percentage of
The beta of an unleveraged required return (i.e. no debt) on an investment when the
Unleveraged required return
The required return on an investment when the investment is financed entirely
Money invested to finance a new firm.
A multilateral development finance agency created by the 1944 Bretton Woods, New
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