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Definition of Income
Net earnings after all expenses for an accounting period are subtracted from all
Cash flow plus change in present value.
Also called a busted convertible, a convertible security that is trading like a straight
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
The market for trading bonds and preferred stock.
One who receives income from a trust.
A bond on which the payment of interest is contingent on sufficient earnings. These bonds are
A mutual fund providing for liberal current income from investments.
A statement showing the revenues, expenses, and income (the
Common stock with a high dividend yield and few profitable investment opportunities.
The revenue from a portfolio of invested assets.
Preferred stock issued by a subsidiary located in a tax haven.
The company's total earnings, reflecting revenues adjusted for costs of doing business,
Also called margin income, the difference between income and cost. For a depository
Gross income less a set of deductions.
For an insurance company, the difference between the premiums earned and the costs
An accounting statement that summarizes information about a company in the following format:
What the business paid to the IRS.
The profit a company makes after cost of goods sold, expenses, and taxes are subtracted from net sales.
RATIO OF NET INCOME TO NET SALES
A ratio that shows how much net income (profit) a company made on each dollar of net sales. Hereâ€™s the formula:
RATIO OF NET SALES TO NET INCOME
A ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way:
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
income that a company receives in the form of dividends on stock in other companies that it holds.
One of the basic financial statements; it lists the revenue and expense accounts of the company.
income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.
The last line of the income Statement; it represents the amount that the company earned during a specified period.
earnings before interest and income tax (EBIT)
A measure of profit that
Financial statement that summarizes sales revenue
net income (also called the bottom line, earnings, net earnings, and net
the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center
current compensation that is taxed at a future date
current compensation that is never taxed
A security that pays a specified cash flow over a
A financial report that summarizes a companyâ€™s revenue, cost of
A government tax on the income earned by an individual or corporation.
The excess of revenues over expenses, including the impact of income taxes.
The net income of a business, less the impact of any financial activity,
common-size income statement
income statement that presents items as a percentage of revenues.
Financial statement that shows the revenues, expenses, and net income of a firm over a period of time.
Also called economic value added. Profit minus cost of capital employed.
income less income tax.
A policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example.
GDP with some adjustments to remove items that do not make it into anyone's hands as income, such as indirect taxes and depreciation. Loosely speaking, it is interpreted as being equal to GDP.
National Income and Product Accounts
The national accounting system that records economic activity such as GDP and related measures.
Permanent Income Hypothesis
Theory that individuals base current consumption spending on their perceived long-run average income rather than their current income.
income expressed in base-year dollars, calculated by dividing nominal income by a price index.
Tax-Related Incomes Policy (TIP)
Tax incentives for labor and business to induce them to conform to wage/price guidelines.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
Adjusted Income from Continuing
Operations Reported income from continuing operations
Pretax income reported on the income statement.
Cash Flowâ€“toâ€“Income Ratio (CFI)
Adjusted cash flow provided by continuing operations
Current Income Tax Expense
That portion of the total income tax provision that is based on
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Income from Continuing Operations
After-tax net income before discontinued operations,
A form of earnings management designed to remove peaks and valleys
Income Tax Expense
See income tax provision.
Income Tax Provision
The expense deduction from pretax book income reported on the
A measure of results produced by the core operations of a firm. It is common
income subject to income tax as reported on the tax return.
income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment.
This is a tax planning strategy of arranging for income to be transferred to family members who are in lower tax brackets than the one earning the income, thus reducing taxes. Even though attribution rules limit income splitting, there are still a number of legitimate ways to do so, such as through the use of spousal RRSPs.
Life Income Fund
Commonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80.
Registered Retirement Income Fund (Canada)
Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.
A financial statement that displays a breakdown of total sales and total expenses.
Earned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits.
Mutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares.
fractional interest discount
the combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
Earnings of a firm as reported on its income statement.
Administrative pricing rules
IRS rules used to allocate income on export sales to a foreign sales corporation.
After-tax profit margin
The ratio of net income to net sales.
Yearly record of a publicly held company's financial condition. It includes a description of the
Average tax rate
Taxes as a fraction of income; total taxes divided by total taxable income.
A plan by U.S. Treasury Secretary James Baker under which 15 principal middle-income debtor
Before-tax profit margin
The ratio of net income before taxes to net sales.
A system that monitors and evaluates the performance of a fixed-income portfolio , as well as the
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
Related: Fixed-income equivalent.
Interest that is not immediately expensed, but rather is considered as an asset and is then
A dividend paid in cash to a company's shareholders. The amount is normally based on
Cash flow after interest and taxes
Net income plus depreciation.
Cash flow from operations
A firm's net cash inflow resulting directly from its regular operations
Commodities Exchange Center (CEC)
The location of five New York futures exchanges: Commodity
The representing of accounting information over multiple years as percentages
In bonds, notes or other fixed income securities, the stated percentage rate of interest, usually
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Debt-service coverage ratio
Earnings before interest and income taxes plus one-third rental charges, divided
An excess of liabilities over assets, of losses over profits, or of expenditure over income.
Diminution in the proportion of income to which each share is entitled.
Net income for the company during the period.
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Effective margin (EM)
Used with SAT performance measures, the amount equaling the net earned spread, or
Investment funds established for the support of institutions such as colleges, private
FASB No. 8
U.S. accounting standard that requires U.S. firms to translate their foreign affiliates' accounts by
Long-lived property owned by a firm that is used by a firm in the production of its income.
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
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Free cash flows
Cash not required for operations or for reinvestment. Often defined as earnings before
Gross domestic product (GDP)
The market value of goods and services produced over time including the
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