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Definition of Institutional investors
Organizations that invest, including insurance companies, depository institutions,
A method developed by BARRA, a consulting firm in
Selling a new issue not by offering it for sale publicly, but by placing it with one of several
The gradual domination of financial markets by institutional investors, as opposed to
A network of trading desks for the major brokerage firms and institutional investors that
Small investors who commit capital for their personal account.
Unemployment due to institutional phenomena such as the degree of labor force unionization, the level of discrimination, and government policies such as unemployment insurance programs, minimum wages, or regulations on business.
An analysis of the level of sales at which a project would make zero profit.
A statistical technique that identifies clusters of stocks whose returns are highly correlated
The Association for Investment Management and Research (AIMR)'s performance Presentation Standards Implementation
The representing of accounting information over multiple years as percentages
A method of analysis in which a firm is compared to others that have a desired
The process of analyzing information on companies and bond issues in order to estimate the
The amount of borrowing that leasing displaces. Firms that do a lot of leasing will be
A method of cash budgeting based on detailed estimates of cash receipts and cash
Lease in which the lessor purchases new equipment from the manufacturer and leases it to the
Commercial paper sold directly by the issuer to investors.
For foreign exchange, the number of U.S. dollars needed to buy one unit of a foreign currency.
Direct search market
Buyers and sellers seek each other directly and transact directly.
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
A statistical process that links the probability of default to a specified set of financial ratios.
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
Foreign direct investment (FDI)
The acquisition abroad of physical assets such as plant and equipment, with
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
An analysis of returns using total return to assess performance over some investment horizon.
The process of dividing each expense item of a given year by the same expense item in
For foreign exchange, the number of units of a foreign currency needed to buy one U.S.$.
Evaluation of risky prospects based on the expected value and variance of possible outcomes.
Multiple-discriminant analysis (MDA)
Statistical technique for distinguishing between two groups on the
Performance attribution analysis
The decomposition of a money manager's performance results to explain
The evaluation of a manager's performance which involves, first, determining
The calculation of the return realized by a money manager over some time interval.
Shares of stock given to managers on the basis of performance as measured by earnings
A bank depositing Eurodollars with (selling Eurodollars to) another bank is often said to be
The sale of a bond or other security directly to a limited number of investors.
Pro forma capital structure analysis
A method of analyzing the impact of alternative capital structure
A statistical technique that can be used to estimate relationships between variables.
Cost to replace a firm's assets.
The frequency with which an asset is replaced by an equivalent asset.
Current cost of replacing the firm's assets.
Idea that future replacement decisions must be taken into account in selecting
The use of horizon analysis to project bond total returns under different reinvestment rates
analysis of the effect on a project's profitability due to changes in sales, cost, and so on.
Stock replacement strategy
A strategy for enhancing a portfolio's return, employed when the futures
Security analysis that seeks to detect and interpret patterns in past security prices.
The process of dividing each expense item in the income statement of a given year by net
A financial analysis technique that relates key amounts on the income statement and balance sheet to a 100 percent or base figure for the present and previous year.
Cost–volume–profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
Costs that are readily traceable to particular products or services.
Costs that are necessary to produce a product/service but are not readily traceable to particular products or services – see overhead.
A method of analysing financial reports to interpret trends and make comparisons by using ratios – two numbers, with one generally expressed as a percentage of the other.
An approach to understanding how changes in one variable of cost–volume–profit analysis are affected by changes in the other variables.
A method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved.
A method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows.
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.
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 method of relating numbers from the various financial statements to one another in order to get meaningful information for comparison.
capital investment analysis
Refers to various techniques and procedures
The process of using financial ratios, calculated from key accounts
The amount necessary to duplicate a company's assets at current
the process of detailing the various repetitive actions that are performed in making a product or
an analytical technique that uses statistical
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
cost driver analysis
the process of investigating, quantifying,
a cost that is distinctly traceable to a particular cost object
see variable costing
the time spent by individuals who work specifically
a readily identifiable part of a product; the cost of such a part
a service department cost allocation approach
a process of evaluating changes that
a cost that cannot be traced explicitly to a particular
least squares regression analysis
a statistical technique that investigates the association between dependent and independent variables; it determines the line of "best fit" for a set of observations by minimizing the sum of the squares
a method of ranking the causes of variation
the process of determining the degree
performance management system
a system reflecting the entire package of decisions regarding performance measurement and evaluation
an amount that a firm would pay to replace an asset or buy a new one that performs the same functions as an asset currently held
a process of determining the amount of change that must occur in a variable before a different decision would be made
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
Statistical analysis techniques that quantify the
A cost that can be clearly associated with specific activities or products.
A costing methodology that only assigns direct labor and material costs
Labor that is specifically incurred to create a product.
Direct materials cost
The cost of all materials used in a cost object, such as finished goods.
Direct materials mix variance
The variance between the budgeted and actual mixes of
A member of a company’s Board of directors.
A cost that is not directly associated with a single activity or event. Such
The cost of any labor that supports the production process, but which is
The 80:20 ratio that states that 20% of the variables included in an
The cost that would be incurred to replace an existing asset with one having the same utility.
analysis of the level of sales at which the company breaks even.
Procedure to determine the likelihood a customer will pay its bills.
Sale of securities to a limited number of investors without a public offering.
Project analysis given a particular combination of assumptions.
analysis of the effects of changes in sales, costs, and so on, on project profitability.
Estimation of the probabilities of different possible outcomes, e.g., from an investment project.
The calculation and comparison of the costs and benefits of a policy or project.
Taxes paid by consumers when they buy goods and services. A sales tax is an example.
The direct transfer of payroll funds from the company bank account
A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.
Advertising designed to elicit sales to customers who can be
A format for the operating section of the cash-flow statement that
Replacement Capital Expenditures
Capital expenditures required to replace productive
The examination of failure incidents to identify components
Parts requiring some modification before being substituted
This subject of replacement of existing policies is covered because sometimes existing life insurance policies are unnecessarily replaced with new coverage resulting in a loss of valuable benefits. If someone suggests replacing your existing coverage, insist on having a comparison disclosure statement completed.
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