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Financial Terms | |
Fixed-income equivalent |
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Definition of Fixed-income equivalentFixed-income equivalentAlso called a busted convertible, a convertible security that is trading like a straight
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' Adjusted Income from ContinuingOperations Reported income from continuing operations Bond-equivalent basisThe method used for computing the bond-equivalent yield. Bond equivalent yieldBond yield calculated on an annual percentage rate method. Differs from annual Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Bond Equivalent YieldBond yield calculated on an annual percentage rate method ![]() Book IncomePretax income reported on the income statement. CASH AND CASH EQUIVALENTSThe balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid. Cash and equivalentsThe value of assets that can be converted into cash immediately, as reported by a Cash equivalentA short-term security that is sufficiently liquid that it may be considered the financial Cash-equivalent itemsTemporary investments of currently excess cash in short-term, high-quality Cash EquivalentsHighly liquid, fixed-income investments with original maturities of three months or less. Cash EquivalentsInstruments or investments of such high liquidity and safety that they are virtually equal to cash. Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations Certainty equivalentAn amount that would be accepted in lieu of a chance at a possible higher, but common-size income statementincome statement that presents items as a percentage of revenues. Common stock equivalentA convertible security that is traded like an equity issue because the optioned Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Current Income Tax ExpenseThat portion of the total income tax provision that is based on Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result 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. Employee Retirement Income Security Act of 1974 (ERISA)A federal Act that sets minimum operational and funding standards for employee benefit Equivalent annual annuityThe equivalent amount per year for some number of years that has a present Equivalent annual benefitThe equivalent annual annuity for the net present value of an investment project. Equivalent annual cash flowAnnuity with the same net present value as the company's proposed investment. Equivalent annual costThe equivalent cost per year of owning an asset over its entire life. equivalent annual costThe cost per period with the same present value as the cost of buying and operating a machine. Equivalent bond yieldAnnual yield on a short-term, non-interest bearing security calculated so as to be Equivalent loanGiven the after-tax stream associated with a lease, the maximum amount of conventional Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax equivalent units of production (EUP)an approximation of the number of whole units of output that could have been Fixed-annuitiesAnnuity contracts in which the insurance company or issuing financial institution pays a Fixed assetLong-lived property owned by a firm that is used by a firm in the production of its income. Fixed assetAn item with a longevity greater than one year, and which exceeds a company’s Fixed asset turnover ratioThe ratio of sales to fixed assets. Fixed assetsThings that the business owns and are part of the business infrastructure – fixed assets may be fixed assetsAn informal term that refers to the variety of long-term operating Fixed AssetsLand, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation. Fixed Assets Turnover RatioA measure of the utilization of a company's fixed assets to Fixed-charge coverage ratioA measure of a firm's ability to meet its fixed-charge obligations: the ratio of Fixed Charge Coverage RatioA measure of how well a company is able to meet its fixed Fixed costA cost that is fixed in total for a given period of time and for given production levels. fixed costa cost that remains constant in total within a specified Fixed costA cost that does not vary in the short run, irrespective of changes in any Fixed costsCosts that do not change with increases or decreases in the volume of goods or services fixed costsCosts that do not depend on the level of output. Fixed-datesIn the Euromarket the standard periods for which Euros are traded (1 month out to a year out) are Fixed-dollar obligationsConventional bonds for which the coupon rate is set as a fixed percentage of the par value. Fixed-dollar securityA nonnegotiable debt security that can be redeemed at some fixed price or according to Fixed-exchange rateA country's decision to tie the value of its currency to another country's currency, gold Fixed Exchange RateAn exchange rate held constant by a government promise to buy or sell dollars at the fixed rate on the foreign exchange market. Fixed ExpensesCost of doing business which does not change with the volume of business. Examples might be rent for business premises, insurance payments, heat and light. fixed expenses (costs)Expenses or costs that remain the same in amount, Fixed-income instrumentsAssets that pay a fixed-dollar amount, such as bonds and preferred stock. Fixed-income marketThe market for trading bonds and preferred stock. Fixed-income securityA security that pays a specified cash flow over a Fixed Interest RateA rate that does not fluctuate with general market conditions. Fixed-location storageAn inventory storage technique under which permanent Fixed overheadThat portion of total overhead costs which remains constant in size fixed overhead spending variancethe difference between the total actual fixed overhead and budgeted fixed overhead; fixed overhead volume variancesee volume variance Fixed price basisAn offering of securities at a fixed price. Fixed-price tender offerA one-time offer to purchase a stated number of shares at a stated fixed price, Fixed-rate loanA loan on which the rate paid by the borrower is fixed for the life of the loan. Fixed Rate LoanLoan for a fixed period of time with a fixed interest rate for the life of the loan. Fixed-rate payerIn an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a IncomeNet earnings after all expenses for an accounting period are subtracted from all Income beneficiaryOne who receives income from a trust. Income bondA bond on which the payment of interest is contingent on sufficient earnings. These bonds are Income from Continuing OperationsAfter-tax net income before discontinued operations, Income fundA mutual fund providing for liberal current income from investments. income fundsMutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares. Income SmoothingA form of earnings management designed to remove peaks and valleys Income SplittingThis is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs. INCOME STATEMENTAn accounting statement that summarizes information about a company in the following format: Income StatementOne of the basic financial statements; it lists the revenue and expense accounts of the company. income statementFinancial statement that summarizes sales revenue Income statementA financial report that summarizes a company’s revenue, cost of income statementFinancial statement that shows the revenues, expenses, and net income of a firm over a period of time. Income statement (statement of operations)A statement showing the revenues, expenses, and income (the Income StatementsA financial statement that displays a breakdown of total sales and total expenses. Income stockCommon stock with a high dividend yield and few profitable investment opportunities. INCOME TAXWhat the business paid to the IRS. Income taxA government tax on the income earned by an individual or corporation. Income Tax ExpenseSee income tax provision. Income Tax ProvisionThe expense deduction from pretax book income reported on the Incomes PolicyA policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example. Intangible fixed assetsNon-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks). Interest incomeincome that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies. Investment incomeThe revenue from a portfolio of invested assets. Life Income FundCommonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80. Longer-Term Fixed AssetsAssets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied. Monthly income preferred security (MIP)Preferred stock issued by a subsidiary located in a tax haven. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |