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Financial Terms | |
Great Depression |
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Definition of Great DepressionGreat DepressionThe period of very high unemployment during the early 1930s.
Related Terms:DepressionA prolonged period of very low economic activity with large-scale unemployment. Accelerated cost recovery system (ACRS)Schedule of depreciation rates allowed for tax purposes. Accounting periodThe period of time for which financial statements are produced – see also financial year. activitya repetitive action performed in fulfillment of business functions activity analysisthe process of detailing the various repetitive actions that are performed in making a product or Activity-based budgetingA method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing. activity-based budgeting (ABB)planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and ![]() Activity-based costingA method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers. activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns activity-based management (ABM)a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received activity centera segment of the production or service activity drivera measure of the demands on activities and, Adjusted Cash Flow Provided by Continuing OperationsCash flow provided by operating 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 Allowance for doubtful accountsA contra account related to accounts receivable that represents the amounts that the company expects will not be collected. Allowance for Doubtful AccountsAn estimate of the uncollectible portion of accounts receivable Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. Annualized holding period returnThe annual rate of return that when compounded t times, would have Annuity PeriodThe time between each payment under an annuity. Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Average Collection PeriodAverage number of days necessary to receive cash for the sale of Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Blow-off topA steep and rapid increase in price followed by a steep and rapid drop. This is an indicator seen ![]() business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay Capital Consumption AllowanceSee depreciation. Capital Cost Allowance (CCA)The annual depreciation expense allowed by the Canadian Income Tax Act. Capital FlowsPurchase by foreigners of our assets (capital inflows) or our purchase of foreign assets (capital outflows). capital recoveryRefers to recouping, or regaining, invested capital over Cash deliveryThe provision of some futures contracts that requires not delivery of underlying assets but 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. Classical MacroeconomicsThe school of macroeconomic thought prior to the rise of Keynesianism. Compounding periodThe length of the time period (for example, a quarter in the case of quarterly compounding periodthe time between each interest computation Credit periodThe length of time for which the customer is granted credit. Critical Growth PeriodsTimes in a company's history when growth is essential and without which survival of the business might be in jeopardy. Cyclical Unemploymentunemployment that increases when the economy enters a recession and decreases when the economy enters a boom. DeliveryThe tender and receipt of an actual commodity or financial instrument in settlement of a futures contract. Delivery noticeThe written notice given by the seller of his intention to make delivery against an open, short Delivery optionsThe options available to the seller of an interest rate futures contract, including the quality Delivery pointsThose points designated by futures exchanges at which the financial instrument or Delivery policyA company’s stated goal for how soon a customer order will be Delivery priceThe price fixed by the Clearing house at which deliveries on futures are in invoiced; also the Delivery versus paymentA transaction in which the buyer's payment for securities is due at the time of Depreciation AllowancesTax deductions that businesses can claim when they spend money on investment goods. Discount periodThe period during which a customer can deduct the discount from the net amount of the bill 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 Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an Discretionary cash flowCash flow that is available after the funding of all positive NPV capital investment Economic assumptionseconomic environment in which the firm expects to reside over the life of the economic components modelAbrams’ model for calculating DLOM based on the interaction of discounts from four economic components. Economic defeasanceSee: in-substance defeasance. Economic dependenceExists when the costs and/or revenues of one project depend on those of another. Economic earningsThe real flow of cash that a firm could pay out forever in the absence of any change in Economic exposureThe extent to which the value of the firm will change because of an exchange rate change. Economic incomeCash flow plus change in present value. economic integrationthe creation of multi-country markets Economic lifeThe period over which a company expects to be able to use an asset. economic order quantityOrder size that minimizes total inventory costs. Economic order quantity (EOQ)The order quantity that minimizes total inventory costs. economic order quantity (EOQ)an estimate of the number economic production run (EPR)an estimate of the number Economic rentsProfits in excess of the competitive level. Economic riskIn project financing, the risk that the project's output will not be salable at a price that will Economic surplusFor any entity, the difference between the market value of all its assets and the market Economic unionAn agreement between two or more countries that allows the free movement of capital, Economic Value Added (EVA)Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge economic value added (EVA)a measure of the extent to which income exceeds the dollar cost of capital; calculated economic value added (EVA)Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost economically reworkedwhen the incremental revenue from the sale of reworked defective units is greater than EconomicsThe study of the allocation and distribution of scare resources among competing wants. 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