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Definition of Mangement's discussion
A report from management to the shareholders that accompanies the firm's
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
A characterization used by the Securities and Exchange
The period of time for which financial statements are produced – see also financial year.
Cumulative gains or losses reported in shareholders'
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
A bond covenant that specifies certain actions the firm must take.
For investment companies, the management fee and "other expenses,"
The periodic rate times the number of periods in a year. For example, a 5%
Interest rate that is annualized using simple interest.
The effective, or true, annual rate of return. The APY is the rate actually
Yearly amount payable by a client for a policy or component.
Yearly record of a publicly held company's financial condition. It includes a description of the
The report required by the Stock Exchange for all listed companies, containing the company’s financial statements.
A report issued to a company’s shareholders, creditors, and regulatory
The fund return, for any 12-month period, including changes in unit value and the reinvestment of distributions, but not taking into account sales, redemption, distribution or other optional charges or income taxes payable by any unitholder that would reduce returns.
If stock X appreciates 1.5% in one month, the annualized gain for that sock over a twelve
Annualized holding period return
The annual rate of return that when compounded t times, would have
The time between each payment under an annuity.
Also called surplus management, the task of managing funds of a financial
A section of an annual report containing the auditor's opinion about the veracity of the
Average Amortization Period
The average useful life of a company's collective amortizable asset base.
Average Collection Period
Average number of days necessary to receive cash for the sale of
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized against
Cash management bill
Very short maturity bills that the Treasury occasionally sells because its cash
Certified Management Accountant (CMA)
a professional designation in the area of management accounting that
Change in Reporting Entity
A change in the scope of the entities included in a set of, typically, consolidated financial statements.
Changes in Financial Position
Sources of funds internally provided from operations that alter a company's
chief financial officer (CFO)
Officer who oversees the treasurer and controller and sets overall financial strategy.
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
The length of the time period (for example, a quarter in the case of quarterly
the time between each interest computation
he written statement that follows any "trade" in the securities markets. Confirmation is issued
Corporate financial management
The application of financial principals within a corporation to create and
Corporate financial planning
financial planning conducted by a firm that encompasses preparation of both
cost management system (CMS)
a set of formal methods
cost of production report
a process costing document that
costs of financial distress
Costs arising from bankruptcy or distorted business decisions before bankruptcy.
Country financial risk
The ability of the national economy to generate enough foreign exchange to meet
The length of time for which the customer is granted credit.
Critical Growth Periods
Times in a company's history when growth is essential and without which survival of the business might be in jeopardy.
Demand Management Policy
Fiscal or monetary policy designed to influence aggregate demand for goods and services.
The period during which a customer can deduct the discount from the net amount of the bill
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
Dupont system of financial control
Highlights the fact that return on assets (ROA) can be expressed in terms
The active manipulation of earnings toward a predetermined target.
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
effective annual interest rate
Interest rate that is annualized using compound interest.
Effective annual yield
annualized interest rate on a security computed using compound interest techniques.
Effective Annual Yield
annualized rate of return on a security computed using compound
Equivalent annual annuity
The equivalent amount per year for some number of years that has a present
Equivalent annual benefit
The equivalent annual annuity for the net present value of an investment project.
Equivalent annual cash flow
Annuity with the same net present value as the company's proposed investment.
Equivalent annual cost
The equivalent cost per year of owning an asset over its entire life.
equivalent annual cost
The cost per period with the same present value as the cost of buying and operating a machine.
The time interval over which a money manager's performance is evaluated.
Extended Amortization Period
An amortization period that continues beyond a long-lived asset's economic useful life.
Extended Amortization Periods
Amortizing capitalized expenditures over estimated useful lives that are unduly optimistic.
External Financial Statements
Corporate financial statements that have been reported on by an external independent accountant.
The production of financial statements, primarily for those interested parties who are external to the business.
a discipline in which historical, monetary
Also called securities analysts and investment analysts, professionals who analyze
Claims on real assets.
Claims to the income generated by real assets. Also called securities.
Economic assistance provided by unrelated third parties, typically government agencies. They may take the form of loans, loan guarantees, subsidies, tax allowances, contributions, or cost-sharing arrangements.
a plan that aggregates monetary details
The management of a firm's costs and expenses in order to control them in relation to
A feature of a debt or credit agreement that is designed to protect the lender or creditor. It is common to characterize covenants as either positive or negative covenants.
A promise made related to financial conditions or events. Often a promise not to allow certain balance sheet items or ratios to fall below an agreed level. Usually found in loan documents, as a protection mechanism.
Events preceding and including bankruptcy, such as violation of loan contracts.
Financial distress costs
Legal and administrative costs of liquidation or reorganization. Also includes
Combining or dividing existing instruments to create new financial products.
A contract entered into now that provides for the delivery of a specified asset in exchange
a monetary reward provided for performance
An expression of economic benefit that motivates behavior that might otherwise not take place.
Institutions that provide the market function of matching borrowers and lenders or
firm that raises money from many small investors and provides financing to businesses or other
Any institution, such as a bank, that takes deposits from savers and loans them to borrowers.
The process whereby financial intermediaries channel funds from lender/savers to borrower/spenders.
Long-term, non-cancelable lease.
Lease in which the service provided by the lessor to the lessee is limited to financing equipment. All other responsibilities related to the possession of equipment, such as maintenance, insurance, and taxes, are borne by the lessee. A financial lease is usually noncancellable and is fully paid out amortized over its term.
Use of debt to increase the expected return on equity. financial leverage is measured by
The equity (ownership) capital of a business can serve
Debt financing amplifies the effects of changes in operating income on the returns to stockholders.
Financial leverage clientele
A group of investors who have a preference for investing in firms that adhere to
Financial leverage ratios
Related: capitalization ratios.
An organized institutional structure or mechanism for creating and exchanging financial assets.
Markets in which financial assets are traded.
Financial Numbers Game
The use of creative accounting practices to alter a financial statement
Objectives of a financial nature that the firm will strive to accomplish during the period
A financial blueprint for the financial future of a firm.
The process of evaluating the investing and financing options available to a firm. It
Status of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement.
That portion of the media devoted to reporting financial news.
The result of dividing one financial statement item by another. Ratios help analysts interpret
financial reports and statements
financial means having to do with
Financial reports or statements
The Profit and Loss account, Balance Sheet and Cash Flow statement of a business.
The risk that the cash flow of an issuer will not be adequate to meet its financial obligations.
Risk to shareholders resulting from the use of debt.
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