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Flow-through method |
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Definition of Flow-through methodFlow-through methodThe practice of reporting to shareholders using straight-line depreciation and
Related Terms:Adjusted Cash Flow Provided by Continuing OperationsCash flow provided by operating Agency pass-throughsMortgage pass-through securities whose principal and interest payments are algebraic methoda process of service department cost allocation Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Benefit Ratio MethodThe proportion of unemployment benefits paid to a company’s Benefit Wage Ratio MethodThe proportion of total taxable wages for laid off Bootstrapping, bootstrap methodAn arithmetic method for backing an Capital FlowsPurchase by foreigners of our assets (capital inflows) or our purchase of foreign assets (capital outflows). Capitalization methodA method of constructing a replicating portfolio in which the manager purchases a Cash flowIn investments, it represents earnings before depreciation , amortization and non-cash charges. cash flowAn obvious but at the same time elusive term that refers to cash cash flowthe receipt or disbursement of cash; when related Cash flowCash received and paid over time. Cash FlowIn investments, NET INCOME plus DEPRECIATION and other noncash charges. In this sense, it is synonymous with CASH EARNINGS. Investors focus on cash flow from operations because of their concern with a firm's ability to pay dividends. Cash flow after interest and taxesNet income plus depreciation. Cash-flow break-even pointThe point below which the firm will need either to obtain additional financing Cash flow coverage ratioThe number of times that financial obligations (for interest, principal payments, Cash Flow ForecastAn estimate of the timing and amount of a company's inflows and outflows of money measured over a specific period of time typically monthly for one to two years then annually for an additional one to three years. cash flow from operating activities, or cash flow from profitThis equals the cash inflow from sales during the period minus the cash Cash flow from operationsA firm's net cash inflow resulting directly from its regular operations Cash flow matchingAlso called dedicating a portfolio, this is an alternative to multiperiod immunization in Cash flow per common shareCash flow from operations minus preferred stock dividends, divided by the 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 STATEMENTA statement that shows where a company’s cash came from and where it went for a period of time, such as a year. Cash Flow statementA financial report that shows the movement in cash for a business during an accounting period. Cash flow time-lineLine depicting the operating activities and cash flows for a firm over a particular period. 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 FLOWS FROM OPERATIONSA section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business. Circular FlowIncome payments to factors of production are spent to buy output. The receipts from these sales are used to pay factors of production, creating a circular flow of income. Completed-Contract MethodA contract accounting method that recognizes contract revenue Conventional pass-throughsAlso called private-label pass-throughs, any mortgage pass-through security not Current rate methodUnder this currency translation method, all foreign currency balance-sheet and income Direct estimate methodA method of cash budgeting based on detailed estimates of cash receipts and cash Direct methodA method of preparing the operating section of the Statement of Cash flows that uses the company’s actual cash inflows and cash outflows. direct methoda service department cost allocation approach Direct-Method FormatA format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities. Direct write-off methodA method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers. Discounted cash flowA technique that determines the present value of future cash Discounted Cash FlowTechniques for establishing the relative worth of a future investment by discounting (at a required rate of return) the expected net cash flows from the project. Discounted cash flow (DCF)Future cash flows multiplied by discount factors to obtain present values. Discounted cash flow (DCF)A method of investment appraisal that discounts future cash flows to present value using a discount rate, which is the risk-adjusted cost of capital. discounted cash flow (DCF)Refers to a capital investment analysis technique Discretionary cash flowCash flow that is available after the funding of all positive NPV capital investment dividend growth methoda method of computing the cost Equity MethodAccounting method for an equity security in cases where the investor has sufficient Equivalent annual cash flowAnnuity with the same net present value as the company's proposed investment. Expected future cash flowsProjected future cash flows associated with an asset of decision. FIFO method (of process costing)the method of cost assignment that computes an average cost per equivalent First in, first-out costing method (FIFO)A process costing methodology that assigns the earliest First-In, First-Out (FIFO) Inventory MethodThe inventory cost-flow assumption that Flow-through basisAn account for the investment credit to show all income statement benefits of the credit Flower bondGovernment bonds that are acceptable at par in payment of federal estate taxes when owned by free cash flowGenerally speaking, this term refers to cash flow from Free Cash FlowThe funds available for distribution to the capital providers of the Free cash flowsCash not required for operations or for reinvestment. Often defined as earnings before Full-Cost MethodA method of accounting for petroleum exploration and development expenditures Fully modified pass-throughsAgency pass-throughs that guarantee the timely payment of both interest and high-low methoda technique used to determine the fixed Incremental cash flowsDifference between the firm's cash flows with and without a project. Indirect methodA method of preparing the operating section of the Statement of Cash flows that does not use the company’s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities. Indirect-Method FormatA format for the operating section of the cash-flow statement that judgmental method (of risk adjustment)an informal method of adjusting for risk that allows the decision maker Last-In, First-Out (LIFO) Inventory MethodThe inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory Log-linear least-squares methodA statistical technique for fitting a curve to a set of data points. One of the method of least squaressee least squares regression analysis method of neglecta method of treating spoiled units in the modified FIFO method (of process costing)the method of cost assignment that uses FIFO to compute a cost per Modified pass-throughsAgency pass-throughs that guarantee (1) timely interest payments and (2) principal Monetary / non-monetary methodUnder this translation method, monetary items (e.g. cash, accounts Mortgage pass-through securityAlso called a passthrough, a security created when one or more mortgage Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. negative cash flowThe cash flow from the operating activities of a business net present value methoda process that uses the discounted Net Present Value (NPV) MethodA method of ranking investment proposals. NPV is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment. Nominal cash flowA cash flow expressed in nominal terms if the actual dollars to be received or paid out are given. Normalizing methodThe practice of making a charge in the income account equivalent to the tax savings NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. Operating cash flowEarnings before depreciation minus taxes. It measures the cash generated from operating cash flowSee cash flow from operating activities. Operating Cash FlowIncome available after the payment of taxes, plus the value of the operations flow documenta document listing all operations Pass-through coupon rateThe interest rate paid on a securitized pool of assets, which is less than the rate Pass-through rateThe net interest rate passed through to investors after deducting servicing, management, Pass-through securitiesA pool of fixed-income securities backed by a package of assets (i.e. mortgages) Payable through draftsA method of making payment that is used to maintain control over payments made Payback methodA capital budgeting analysis method that calculates the amount of Percentage-of-Completion MethodA contract accounting method that recognizes contract Price-specie-flow mechanismAdjustment mechanism under the classical gold standard whereby Private-label pass-throughsRelated: Conventional pass-throughs. Process flow productionA production configuration in which products are continually Production-flow commitmentAn agreement by the loan purchaser to allow the monthly loan quota to be Purchase methodAccounting for an acquisition using market value for the consolidation of the two entities' Purchase methodAn accounting method used to combine the financial statements of PV (present value of cash flows)the value in today’s dollars of cash flows that occur in different time periods.
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