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Definition of Operating exposure
Degree to which exchange rate changes, in combination with price changes, will alter a
The change in the value of a firm's foreign currency denominated accounts due to a
For investment companies, the management fee and "other expenses,"
The extent to which the value of the firm will change because of an exchange rate change.
Offsetting exposures in one currency with exposures in the same or another currency,
Losses that a firm can take advantage of to reduce taxes.
The ratio of net operating income to net sales.
Earnings before depreciation minus taxes. It measures the cash generated from
The average time intervening between the acquisition of materials or services and the final
The ratio of operating margin to net sales.
Short-term, cancelable lease. A type of lease in which the period of contract is less than the
Fixed operating costs, so-called because they accentuate variations in profits.
The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is
Events and decisions concerning the short-term finance of a firm, such as
Risk to a firm with known future cash flows in a foreign currency that arises from
Risk of adverse effects on a firm's financial statements that may arise from changes in exchange rates.
The total amount that was spent to run a company this year.
The profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation.
cash flow from operating activities, or cash flow from profit
This equals the cash inflow from sales during the period minus the cash
Includes all the sales and expense activities of a business.
operating cash flow
See cash flow from operating activities.
A relatively small percent increase or decrease in
See earnings before interest and income tax (EBIT).
Operating Cash Flow
Income available after the payment of taxes, plus the value of the
degree of operating leverage
a factor that indicates how a percentage change in sales, from the existing or current
a budget expressed in both units and dollars
the proportionate relationship between
Any expense associated with the general, sales, and administrative
The net income of a business, less the impact of any financial activity,
The rental of an asset from a lessor, but not under terms that would
degree of operating leverage (DOL)
Percentage change in profits given a 1 percent change in sales.
Degree to which costs are fixed.
operating risk (business risk)
Risk in firm’s operating income.
Cash Flow Provided by Operating Activities
With some exceptions, the cash effects of transactions
A term frequently used to describe earnings after the removal of the
A measure of results produced by the core operations of a firm. It is common
One where the risks and benefits, as well as ownership, stays with the lessor.
Operating Line of Credit
A bank's commitment to make loans to a particular borrower up to a specified maximum for a specified period, usually one year.
A loan advanced under an operating line of credit.
The amount of money the company must spend on overhead, distribution, taxes, underwriting the risk and servicing the policy. It is a factor in calculating premium rates.
A central financial subsidiary used by an MNC to reduce transaction exposure by having
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