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Financial Terms | |
Gearing |
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Definition of GearingGearingA measure of the extent of long-term debt in comparison with shareholders’ funds. GearingFinancial leverage.
Related Terms:12b-1 fundsMutual funds that do not charge an upfront or back-end commission, but instead take out up to Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Allowance for bad debtsAn offset to the accounts receivable balance, against which Average (across-day) measuresAn estimation of price that uses the average or representative price of a Bad debtAn account receivable that cannot be collected. Bad debtsThe amount of accounts receivable that is not expected to be collected. ![]() bad debtsRefers to accounts receivable from credit sales to customers Beta equation (Mutual Funds)The beta of a fund is determined as follows: Beta (Mutual Funds)The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means Changes in Financial PositionSources of funds internally provided from operations that alter a company's chief financial officer (CFO)Officer who oversees the treasurer and controller and sets overall Financial strategy. Coefficient of determinationA measure of the goodness of fit of the relationship between the dependent and coefficient of determinationa measure of dispersion that Comparison universeThe collection of money managers of similar investment style used for assessing Corporate financial managementThe application of Financial principals within a corporation to create and ![]() Corporate financial planningFinancial planning conducted by a firm that encompasses preparation of both Cost of DebtThe cost of debt (bonds, loans, etc.) that a company is charged for Cost of fundsInterest rate associated with borrowing money. costs of financial distressCosts arising from bankruptcy or distorted business decisions before bankruptcy. Country financial riskThe ability of the national economy to generate enough foreign exchange to meet Credit TermsConditions under which credit is extended by a lender to a borrower. DebtMoney borrowed. DebtBorrowings from financiers. Debtfunds owed to another entity. Debt capacityAbility to borrow. The amount a firm can borrow up to the point where the firm value no Debt CapacityAn assessment of ability and willingness to repay a loan from anticipated future cash flow or other sources. Debt (Credit Insurance)Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. debt may or may not be secured. Debt displacementThe amount of borrowing that leasing displaces. Firms that do a lot of leasing will be Debt/equity ratioIndicator of Financial leverage. Compares assets provided by creditors to assets provided Debt/Equity RatioA comparison of debt to equity in a company's capital structure. Debt FinancingRaising loan capital through the creation of debt by issuing a form of paper evidencing amounts owed and payable on specified dates or on demand. Debt instrumentAn asset requiring fixed dollar payments, such as a government or corporate bond. Debt InstrumentAny Financial asset corresponding to a debt, such as a bond or a treasury bill. Debt leverageThe amplification of the return earned on equity when an investment or firm is financed Debt limitationA bond covenant that restricts in some way the firm's ability to incur additional indebtedness. Debt marketThe market for trading debt instruments. Debt ratioTotal debt divided by total assets. Debt RatioThe percentage of debt that is used in the total capitalization of a Debt reliefReducing the principal and/or interest payments on LDC loans. Debt securitiesIOUs created through loan-type transactions - commercial paper, bank CDs, bills, bonds, and Debt SecurityA security representing a debt relationship with an enterprise, including a government Debt serviceInterest payment plus repayments of principal to creditors, that is, retirement of debt. Debt-service coverage ratioEarnings before interest and income taxes plus one-third rental charges, divided Debt service parity approachAn analysis wherein the alternatives under consideration will provide the firm Debt swapA set of transactions (also called a debt-equity swap) in which a firm buys a country's dollar bank debt-to-equity ratioA widely used Financial statement ratio to assess the Debtor in possessionA firm that is continuing to operate under Chapter 11 bankruptcy process. Debtor-in-possession financingNew debt obtained by a firm during the Chapter 11 bankruptcy process. DebtorsSales to customers who have bought goods or services on credit but who have not yet paid their debt. degree of operating leveragea factor that indicates how a percentage change in sales, from the existing or current degree of operating leverage (DOL)Percentage change in profits given a 1 percent change in sales. Deterministic modelsLiability-matching models that assume that the liability payments and the asset cash DisintermediationWithdrawal of funds from a Financial institution in order to invest them directly. Dividend yield (Funds)Indicated yield represents return on a share of a mutual fund held over the past 12 Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms EFT (electronic funds transfer)funds which are electronically credited to your account (e.g. direct deposit), or electronically debited from your account on an ongoing basis (e.g. a pre-authorized monthly bill payment, or a monthly loan or mortgage payment). A wire transfer is a form of EFT. Endowment fundsInvestment funds established for the support of institutions such as colleges, private Euro-medium term note (Euro-MTN)A non-underwritten Euronote issued directly to the market. Euro- External Financial StatementsCorporate Financial statements that have been reported on by an external independent accountant. Federal fundsNon-interest bearing deposits held in reserve for depository institutions at their district Federal Federal funds marketThe market where banks can borrow or lend reserves, allowing banks temporarily Federal funds rateThis is the interest rate that banks with excess reserves at a Federal Reserve district bank Federal Funds RateThe interest rate at which banks lend deposits at the Federal Reserve to one another overnight. Financial accountingThe production of Financial statements, primarily for those interested parties who are external to the business. financial accountinga discipline in which historical, monetary Financial analystsAlso called securities analysts and investment analysts, professionals who analyze Financial assetsClaims on real assets. financial assetsClaims to the income generated by real assets. Also called securities. Financial AssistanceEconomic 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. financial budgeta plan that aggregates monetary details Financial controlThe management of a firm's costs and expenses in order to control them in relation to Financial CovenantA 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 CovenantsA 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. Financial distressEvents preceding and including bankruptcy, such as violation of loan contracts. Financial distress costsLegal and administrative costs of liquidation or reorganization. Also includes Financial engineeringCombining or dividing existing instruments to create new Financial products. Financial futureA contract entered into now that provides for the delivery of a specified asset in exchange financial incentivea monetary reward provided for performance Financial IncentiveAn expression of economic benefit that motivates behavior that might otherwise not take place. Financial intermediariesInstitutions that provide the market function of matching borrowers and lenders or financial intermediaryFirm that raises money from many small investors and provides financing to businesses or other Financial IntermediaryAny institution, such as a bank, that takes deposits from savers and loans them to borrowers. Financial IntermediationThe process whereby Financial intermediaries channel funds from lender/savers to borrower/spenders. Financial leaselong-term, non-cancelable lease. Financial LeaseLease 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. Financial leverageUse of debt to increase the expected return on equity. Financial leverage is measured by financial leverageThe equity (ownership) capital of a business can serve financial leveragedebt financing amplifies the effects of changes in operating income on the returns to stockholders. Financial leverage clienteleA group of investors who have a preference for investing in firms that adhere to Financial leverage ratiosRelated: capitalization ratios. Financial marketAn organized institutional structure or mechanism for creating and exchanging Financial assets. financial marketsMarkets in which Financial assets are traded. Financial Numbers GameThe use of creative accounting practices to alter a Financial statement Financial objectivesObjectives of a Financial nature that the firm will strive to accomplish during the period Financial planA Financial blueprint for the Financial future of a firm. Financial planningThe process of evaluating the investing and financing options available to a firm. It Financial PositionStatus of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its Financial statement. Financial pressThat portion of the media devoted to reporting Financial news. Financial ratioThe result of dividing one Financial statement item by another. Ratios help analysts interpret financial reports and statementsFinancial means having to do with Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |