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Definition of Hypothecation
The pledge of property and assets to secure a loan. hypothecation does not transfer title, but it does provide the right to sell the hypothecated property in the event of default.
Goods may be returned to the seller by the purchaser without restrictions.
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Cash flow provided by operating
A right of shareholders in a merger to demand the payment of a fair price for their shares, as
A firm's productive resources.
Anything of value that a company owns.
Things that the business owns.
Items owned by the company or expenses that have been paid for but have not been used up.
A common element of a financial plan that describes projected capital spending and the
A loan in which two companies in separate countries borrow each other's currency for a
a listing of service departments in an order that begins with the one providing the most service
A transaction to move inventory from one storage bin to another.
A short term loan to cover the immediate cash requirements until permanent financing is received.
Related: Call money rate.
A mortgage loan on newly developed property that the builder subsidizes during the
A bank term loan that calls for no amortization.
This is an agreement entered into by the owners of a business to define the conditions under which the interests of each shareholder will be bought and sold. The agreement sets the value of each shareholders interest and stipulates what happens when one of the owners wishes to dispose of his/her interest during his/her lifetime as well as disposal of interest upon death or disability. Life insurance, critical illness coverage and disability insurance are major considerations to help fund this type of agreement.
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
Commercial Business Loan (Credit Insurance)
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.
One of two parties to a conditional sale agreement, the other being the conditional buyer.
Term life insurance products are offered as non-convertible or convertible to a certain time in the future. The coversion right has a time limit, usually to the policy holder's age 60 or possibly even age 70. This right means that the policy holder has the right to convert their existing policy to another specific different plan of permanent insurance within the specified time period, without providing evidence of insurability. There is a slightly higher cost for a term policy with the conversion priviledge but it is a valuable feature should a policy holder's health change for the worst and continued insurance coverage becomes a necessity.
A provision under which default on one debt obligation triggers default on another debt
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Current refers to cash and those assets that will be turned
Cash and other company assets that can be readily turned into cash within one year.
Overnight, collateralized loan made to a dealer financing his position by borrowing from a
Failure to make timely payment of interest or principal on a debt security or to otherwise comply
The failure by a debtor to make a principal or interest payment in a timely
Failure of a debtor to make timely payments of principal and interest as they become due.
A differential in promised yield that compensates the investor for the risk inherent in
Difference in promised yields between a default-free bond and a riskier bond.
Also referred to as credit risk (as gauged by commercial rating companies), the risk that an
A loan which must be repaid in full on demand.
Depository transfer check (DTC)
Check made out directly by a local bank to a particular firm or person.
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
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.
Electronic depository transfers
The transfer of funds between bank accounts through the Automated
A program, such as social security, under which everyone meeting the eligibility requirements is entitled to receive benefits from the program, so that costs are not known in advance.
Given the after-tax stream associated with a lease, the maximum amount of conventional
The risk that the ability of an issuer to make interest and principal payments will change because
A statistical study that examines how the release of information affects prices at a particular time.
Events of default
Contractually specified events that allow lenders to demand immediate repayment of a debt.
In connection with a rights offering, shares of stock that are trading without the rights attached.
The date on which a share of common stock begins trading ex-rights.
Exchange of assets
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Farm Improvement and Marketing Cooperatives Loans Act
Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The
Claims on real assets.
Claims to the income generated by real assets. Also called securities.
Things that the business owns and are part of the business infrastructure – fixed assets may be
An informal term that refers to the variety of long-term operating
Land, 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 Ratio
A measure of the utilization of a company's fixed assets to
A loan on which the rate paid by the borrower is fixed for the life of the loan.
Fixed Rate Loan
loan for a fixed period of time with a fixed interest rate for the life of the loan.
Freddie Mac (Federal Home Loan Mortgage Corporation)
A Congressionally chartered corporation that
assets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises.
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
loan made by one unit of a corporation to another unit of the same corporation.
The movement of inventory from one company location to
A secured short-term loan to purchase inventory. The three basic forms are a blanket
loans of $1 billion or more. Or, loans that exceed the statutory size limit eligible for purchase or
The rights of a firm's securityholders in the event the firm liquidates.
Loan amortization schedule
The schedule for repaying the interest and principal on a loan.
Borrowed funds having a fixed interest rate.
Express stipulations included in loan agreements that are designed to monitor
Group of banks sharing a loan. See: syndicate.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
Amounts that have been loaned to the company and that it still owes.
Value of property, equipment and other capital assets minus the depreciation. This is an
Longer-Term Fixed Assets
assets 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.
Give the borrower the possibility of drawing a loan in different currencies.
loans usually represented by conventional mortgages on multi-family rental apartments.
Negative Loan Covenants
loan covenants designed to limit a corporate borrower's behavior
Negative pledge clause
A bond covenant that requires the borrower to grant lenders a lien equivalent to any
negotiated transfer price
an intracompany charge for goods
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
Official unrequited transfers
Include a variety of subsidies, military aid, voluntary cancellation of debt,
A loan advanced under an operating line of credit.
Optimum selling price
The price at which profit is maximized, which takes into account the cost behaviour of fixed and variable costs and the relationship between price and demand for a product/service.
Also called the option writer , the party who grants a right to trade a security at a given price in
A cluster of accounts that are listed after fixed assets on the balance sheet,
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Actual forward rate expressed in dollars per currency unit, or vice versa.
A process whereby two companies in different countries borrow each other's currency for a
assets, the title of which are held personally rather than in the name of some other legal entity.
A lump sum that you borrow from a financial institution for a specified period of time. To repay the loan, you pay interest on the entire lump sum, and make payments on a scheduled basis.
Positive Loan Covenants
loan covenants expressing minimum and maximum financial measures
Common stockholder's right to anything of value distributed by the company.
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
a cost incurred to improve quality by preventing
Private unrequited transfers
Refers to resident immigrant workers' remittances to their country of origin as
Project loan certificate (PLC)
A primary program of Ginnie Mae for securitizing FHA-insured and coinsured
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