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Definition of high-low method
a technique used to determine the fixed
Cash flow provided by operating
a process of service department cost allocation
An offset to the accounts receivable balance, against which
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
An estimate of the uncollectible portion of accounts receivable
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
The inventory cost-flow assumption that assigns the average
The proportion of unemployment benefits paid to a company’s
The proportion of total taxable wages for laid off
A steep and rapid increase in price followed by a steep and rapid drop. This is an indicator seen
An arithmetic method for backing an
The annual depreciation expense allowed by the Canadian Income Tax Act.
Purchase by foreigners of our assets (capital inflows) or our purchase of foreign assets (capital outflows).
A method of constructing a replicating portfolio in which the manager purchases a
In investments, it represents earnings before depreciation , amortization and non-cash charges.
An obvious but at the same time elusive term that refers to cash
the receipt or disbursement of cash; when related
Cash received and paid over time.
In 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 taxes
Net income plus depreciation.
Cash-flow break-even point
The point below which the firm will need either to obtain additional financing
Cash flow coverage ratio
The number of times that financial obligations (for interest, principal payments,
Cash Flow Forecast
An 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 profit
This equals the cash inflow from sales during the period minus the cash
Cash flow from operations
A firm's net cash inflow resulting directly from its regular operations
Cash flow matching
Also called dedicating a portfolio, this is an alternative to multiperiod immunization in
Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the
Cash Flow Provided by Operating Activities
With some exceptions, the cash effects of transactions
Cash Flow Provided or Used from Financing Activities
Cash receipts and payments involving
Cash Flow Provided or Used from Investing Activities
Cash receipts and payments involving
A 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 statement
A financial report that shows the movement in cash for a business during an accounting period.
Cash flow time-line
Line 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 ACTIVITIES
A 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 ACTIVITIES
A 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 OPERATIONS
A 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.
Income 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.
A contract accounting method that recognizes contract revenue
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Tax deductions that businesses can claim when they spend money on investment goods.
Direct estimate method
A method of cash budgeting based on detailed estimates of cash receipts and cash
A method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows.
a service department cost allocation approach
A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.
Direct write-off method
A 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 flow
A technique that determines the present value of future cash
Discounted Cash Flow
Techniques 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 flow
Cash flow that is available after the funding of all positive NPV capital investment
dividend growth method
a method of computing the cost
Accounting method for an equity security in cases where the investor has sufficient
Equivalent annual cash flow
Annuity with the same net present value as the company's proposed investment.
Expected future cash flows
Projected 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 Method
The inventory cost-flow assumption that
An account for the investment credit to show all income statement benefits of the credit
The practice of reporting to shareholders using straight-line depreciation and
Government bonds that are acceptable at par in payment of federal estate taxes when owned by
free cash flow
Generally speaking, this term refers to cash flow from
Free Cash Flow
The funds available for distribution to the capital providers of the
Free cash flows
Cash not required for operations or for reinvestment. Often defined as earnings before
A method of accounting for petroleum exploration and development expenditures
A contract that obligates a purchaser of a project's output to make cash
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
A financial chart usually used to plot the high, low,
See money base.
The highest (intraday) price of a stock over the past 52 weeks, adjusted for any stock splits.
High-Risk Small Business
Firm viewed as being particularly subject to risk from an investors perspective.
Highly leveraged transaction (HLT)
Bank loan to a highly leveraged firm.
Incremental cash flows
Difference between the firm's cash flows with and without a project.
A 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.
A 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 Method
The inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory
Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
This is the day's lowest price of a security that has changed hands between a buyer and a seller.
Low price-earnings ratio effect
The tendency of portfolios of stocks with a low price-earnings ratio to
Lower of cost or market
An accounting valuation rule that is used to reduce the
method of least squares
see least squares regression analysis
method of neglect
a 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
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Moving average inventory method
An inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase.
negative cash flow
The cash flow from the operating activities of a business
net present value method
a process that uses the discounted
Net Present Value (NPV) Method
A 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 flow
A cash flow expressed in nominal terms if the actual dollars to be received or paid out are given.
The 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 flow
Earnings before depreciation minus taxes. It measures the cash generated from
operating cash flow
See cash flow from operating activities.
Operating Cash Flow
Income available after the payment of taxes, plus the value of the
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