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Definition of financial markets
markets in which financial assets are traded.
markets in which no trader has the power to change the price of
The financial markets of developing economies.
The gradual domination of financial markets by institutional investors, as opposed to
Claims that can be bought and sold in financial markets, such as those of stockholders and
Claims that cannot be easily bought and sold in the financial markets, such as those of
The SEC is a federal agency that regulates the U.S.financial markets.
A model for estimating equilibrium rates of return and values of
financial markets in which security prices rapidly reflect all relevant information about asset values.
Manager responsible for financing, cash management, and relationships with financial markets and institutions.
markets in which the prevailing price is determined through the free interaction of
Also called spot markets, these are markets that involve the immediate delivery of a security
Sources of funds internally provided from operations that alter a company's
The application of financial principals within a corporation to create and
financial planning conducted by a firm that encompasses preparation of both
The ability of the national economy to generate enough foreign exchange to meet
markets for derivative instruments.
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
Also called securities analysts and investment analysts, professionals who analyze
Claims on real assets.
The management of a firm's costs and expenses in order to control them in relation to
Events preceding and including bankruptcy, such as violation of loan contracts.
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
Combining or dividing existing instruments to create new financial products.
A contract entered into now that provides for the delivery of a specified asset in exchange
Institutions that provide the market function of matching borrowers and lenders or
Long-term, non-cancelable lease.
Use of debt to increase the expected return on equity. financial leverage is measured by
Financial leverage clientele
A group of investors who have a preference for investing in firms that adhere to
Financial leverage ratios
Related: capitalization ratios.
An organized institutional structure or mechanism for creating and exchanging financial assets.
Objectives of a financial nature that the firm will strive to accomplish during the period
A financial blueprint for the financial future of a firm.
The process of evaluating the investing and financing options available to a firm. It
That portion of the media devoted to reporting financial news.
The result of dividing one financial statement item by another. Ratios help analysts interpret
The risk that the cash flow of an issuer will not be adequate to meet its financial obligations.
London International Financial Futures Exchange (LIFFE)
A London exchange where Eurodollar futures
Long-term financial plan
financial plan covering two or more years of future operations.
London International Financial Futures Exchange (LIFFE)
London exchange where Eurodollar futures as well as futures-style options are traded.
markets in which each transaction is separately negotiated between buyer and seller (i.e.
Include such things as freight, insurance, passenger services, and travel.
Notes to the financial statements
A detailed set of notes immediately following the financial statements in
Pro forma financial statements
financial statements as adjusted to reflect a projected or planned transaction.
Short-term financial plan
A financial plan that covers the coming fiscal year.
Society for Worldwide Interbank Financial Telecommunications (SWIFT)
A dedicated computer network to support funds transfer messages internationally between over 900 member banks worldwide.
Related: cash markets
Statement of Financial Accounting Standards No. 8
This is a currency translation standard previously in
Statement of Financial Accounting Standards No. 52
This is the currency translation standard currently
The production of financial statements, primarily for those interested parties who are external to the business.
Financial reports or statements
The Profit and Loss account, Balance Sheet and Cash Flow statement of a business.
The accounting period adopted by a business for the production of its financial statements.
statement of financial condition
See balance sheet.
The equity (ownership) capital of a business can serve
financial reports and statements
financial means having to do with
a discipline in which historical, monetary
a plan that aggregates monetary details
a monetary reward provided for performance
markets for long-term financing.
chief financial officer (CFO)
Officer who oversees the treasurer and controller and sets overall financial strategy.
costs of financial distress
Costs arising from bankruptcy or distorted business decisions before bankruptcy.
Claims to the income generated by real assets. Also called securities.
Firm that raises money from many small investors and provides financing to businesses or other
Debt financing amplifies the effects of changes in operating income on the returns to stockholders.
Risk to shareholders resulting from the use of debt.
Ready access to cash or debt financing.
Any institution, such as a bank, that takes deposits from savers and loans them to borrowers.
The process whereby financial intermediaries channel funds from lender/savers to borrower/spenders.
A feature of a debt or credit agreement that is designed to protect the lender or creditor. It is common to characterize covenants as either positive or negative covenants.
Financial Numbers Game
The use of creative accounting practices to alter a financial statement
Fraudulent Financial Reporting
Intentional misstatements or omissions of amounts or disclosures
Restatement of Prior-Year Financial Statements
A recasting of prior-year financial statements to remove the effects of an error or other adjustment and report them on a new basis.
Efficient Markets Hypothesis
The hypothesis that securities are typically in equilibrium--that they are fairly priced in the sense that the price reflects all publicly available information on the security.
External Financial Statements
Corporate financial statements that have been reported on by an external independent accountant.
Economic assistance provided by unrelated third parties, typically government agencies. They may take the form of loans, loan guarantees, subsidies, tax allowances, contributions, or cost-sharing arrangements.
A promise made related to financial conditions or events. Often a promise not to allow certain balance sheet items or ratios to fall below an agreed level. Usually found in loan documents, as a protection mechanism.
An expression of economic benefit that motivates behavior that might otherwise not take place.
Lease in which the service provided by the lessor to the lessee is limited to financing equipment. All other responsibilities related to the possession of equipment, such as maintenance, insurance, and taxes, are borne by the lessee. A financial lease is usually noncancellable and is fully paid out amortized over its term.
Status of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement.
Financial Trend Analysis
Process of analyzing financial statements of a company for any continuing relationship.
Future-Oriented Financial Information
Information about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection.
financial statements and financial information made public.
The process of creating a passthrough, such as the mortgage pass-through security, by which
Top-down equity management style
A management style that begins with an assessment of the overall
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