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Definition of Per Diem
A fixed rate paid to employees traveling on behalf of a business,
The period of time for which financial statements are produced – see also financial year.
Cash flow provided by operating
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
The annual rate of return that when compounded t times, would have
The time between each payment under an annuity.
The average useful life of a company's collective amortizable asset base.
Average number of days necessary to receive cash for the sale of
The ratio of accounts receivables to sales, or the total
A method developed by BARRA, a consulting firm in
This important ratio equals the net
Generally speaking, these terms
The ratio of stockholder equity to the average number of common shares. Book value
Book Value per Share
The book value of a company divided by the number of shares
Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's
cash flow from operating activities, or cash flow from profit
This equals the cash inflow from sales during the period minus the cash
Cash flow from operations
A firm's net cash inflow resulting directly from its regular operations
Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the
Cash Flow Provided by Operating Activities
With some exceptions, the cash effects of transactions
CASH FLOWS FROM OPERATIONS
A section on the cash-flow Stockholders’ equity statement that shows how much cash came into a company and how much went out during the normal course of business.
Short-term unsecured promissory notes issued by a corporation. The maturity of
Short-term unsecured notes issued by firms.
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s performance Presentation Standards Implementation
The length of the time period (for example, a quarter in the case of quarterly
the time between each interest computation
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.
degree of operating leverage
a factor that indicates how a percentage change in sales, from the existing or current
degree of operating leverage (DOL)
percentage change in profits given a 1 percent change in sales.
diluted earnings per share (EPS)
This measure of earnings per share
Commercial paper sold directly by the issuer to investors.
A business segment that has been or is planned to be closed or sold off.
Net income and the gain or loss on disposal of a business segment whose assets and operations are clearly distinguishable from the other assets and operations of an entity.
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
the degree of variability or difference; it is measured
Dividends per share
Amount of cash paid to shareholders expressed as dollars per share.
Dividends per share
Dividends paid for the past 12 months divided by the number of common shares
Earnings per Share
A measure of the earnings generated by a company on a per
Earnings per share (EPS)
EPS, as it is called, is a company's profit divided by its number of outstanding
earnings per share (EPS)
See basic earnings per share and diluted earnings per share.
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
Short-term notes with maturities up to 360 days that are issued by companies in
The time interval over which a money manager's performance is evaluated.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
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.
Farm Improvement and Marketing Cooperatives Loans Act
FHA prepayment experience
The percentage of loans in a pool of mortgages outstanding at the origination
Full Credit Period
The period of trade credit given by a supplier to its customer.
Fully diluted earnings per shares
Earnings per share expressed as if all outstanding convertible securities
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
A specific period of time after a premium payment is due during which the policy owner may make a payment, and during which, the protection of the policy continues. The grace period usually ends in 30 days.
Length of time during which repayments of loan principal are excused. Usually occurs at the start of the loan period.
A constant stream of cash flows without end that is expected to rise indefinitely.
Length of time that an individual holds a security.
Holding period return
The rate of return over a given period.
Extremely high inflation.
Income from Continuing Operations
After-tax net income before discontinued operations,
Income statement (statement of operations)
A statement showing the revenues, expenses, and income (the
A portfolio strategy in which a portfolio is created that will be capable of
Net Cash after Operations
Cash flow available for debt service—the payment of interest and principal on loans. Generally calculated as cash provided by operating activities before interest
Net operating losses
Losses that a firm can take advantage of to reduce taxes.
Net operating margin
The ratio of net operating income to net sales.
The period of time between the end of the discount period and the date payment is due.
In the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not
Odd first or last period
Fixed-income securities may be purchased on dates
Purchase or sale of government securities by the monetary authorities to increase or
Buying or selling of bonds by the central bank.
Open-market purchase operation
A systematic program of repurchasing shares of stock in market
Includes all the sales and expense activities of a business.
a budget expressed in both units and dollars
Operating cash flow
Earnings before depreciation minus taxes. It measures the cash generated from
operating cash flow
See cash flow from operating activities.
Operating Cash Flow
Income available after the payment of taxes, plus the value of the
The average time intervening between the acquisition of materials or services and the final
A term frequently used to describe earnings after the removal of the
Any expense associated with the general, sales, and administrative
The total amount that was spent to run a company this year.
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.
Degree to which exchange rate changes, in combination with price changes, will alter a
The net income of a business, less the impact of any financial activity,
A measure of results produced by the core operations of a firm. It is common
Short-term, cancelable lease. A type of lease in which the period of contract is less than the
The rental of an asset from a lessor, but not under terms that would
One where the risks and benefits, as well as ownership, stays with the lessor.
Fixed operating costs, so-called because they accentuate variations in profits.
A relatively small percent increase or decrease in
the proportionate relationship between
Degree to which costs are fixed.
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 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.
See earnings before interest and income tax (EBIT).
Operating profit margin
The ratio of operating margin to net sales.
The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is
operating risk (business risk)
Risk in firm’s operating income.
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