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Definition of Privatization
The act of returning state-owned or state-run companies back to the private sector, usually by
This doctrine says that a nation is sovereign within its own borders and its domestic
A market in which there is much trading.
A strategy that uses available information and forecasting techniques to seek a
a repetitive action performed in fulfillment of business functions
the process of detailing the various repetitive actions that are performed in making a product or
A method of budgeting that develops budgets based on expected activities and cost drivers – see also activity-based costing.
planning approach applying activity drivers to estimate the levels and costs of activities necessary to provide the budgeted quantity and
A method of costing that uses cost pools to accumulate the cost of significant business activities and then assigns the costs from the cost pools to products or services based on cost drivers.
A relatively new method advocated for the
a process using multiple cost drivers to predict and allocate costs to products and services;
A cost allocation system that compiles costs and assigns
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
a segment of the production or service
a measure of the demands on activities and,
The actual expenditure made to acquire an asset, which includes the supplierinvoiced
actual cost system
a valuation method that uses actual direct
The physical commodity underlying a futures contract. Cash commodity, physical.
One who uses statistical information to evaluate the probability of future events and prices insurance products.
ADF (annuity discount factor)
the present value of a finite stream of cash flows for every beginning $1 of cash flow.
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
The pool factor implied by the scheduled amortization assuming no prepayemts.
Present value of $1 paid for each of t periods.
Present value of an annuity of $1 per period.
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
Bond or note secured by assets of company.
A security that is collateralized by loans, leases, receivables, or installment contracts
The fee paid on the extension date if the buyer wishes to continue the option.
The subsequent subtraction from inventory records of those parts used
Brokerage house clerical operations that support, but do not include, the trading of stocks and
Back To Back Annuity
This term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application.
An intercompany loan channeled through a bank.
A loan in which two companies in separate countries borrow each other's currency for a
1) When bond yields and prices fall, the market is said to back-up.
A procedure for making the effective date of a policy earlier than the application date. backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
A market condition in which futures prices are lower in the distant delivery months than in
Bill and Hold Practices
Products that have been sold with an explicit agreement that delivery
The managing underwriter for a new issue. The book runner maintains the book of securities sold.
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
an activity that is necessary for the operation of the business but for which a customer would not want to pay
Another term for a repo.
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 Provided by Operating Activities
With some exceptions, the cash effects of transactions
Cash Flow Provided or Used from Financing Activities
Cash receipts and payments involving
Cash Flow Provided or Used from Investing Activities
Cash receipts and payments involving
A statement that shows where a company’s cash came from and where it went for a period of time, such as a year.
Cash Flow statement
A financial report that shows the movement in cash for a business during an accounting period.
CASH FLOWS FROM FINANCING ACTIVITIES
A section on the cash-flow statement that shows how much cash a company raised by selling stocks or bonds this year and how much was paid out for cash dividends and other finance-related obligations.
CASH FLOWS FROM INVESTING ACTIVITIES
A section on the cashflow statement that shows how much cash came in and went out because of various investing activities like purchasing machinery.
Cash settlement contracts
Futures contracts, such as stock index futures, that settle for cash, not involving
A transaction where exchange is immediate, as contrasted to a forward contract, which
The market model applied to a single security. The slope of the line is a security's beta.
a system using transfer prices; see transfer
The percentage of a given month's sales collected during the month of sale and each
common-size income statement
Income statement that presents items as a percentage of revenues.
A contract accounting method that recognizes contract revenue
computer-aided manufacturing (CAM)
the use of computers to control production processes through numerically
computer integrated manufacturing (CIM)
the integration of two or more flexible manufacturing systems through the use of a host computer and an information networking system
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
Consolidated Omnibus Budget Reconciliation Act (COBRA)
A federal act
Consumer Credit Protection Act
A federal act specifying the proportion of
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual
A formal written statement of the rights and obligations of each party to a transaction.
Method of accounting for sales or service agreements where completion
an external party that has been granted an outsourcing contract to produce a part or component for an entity
The month in which futures contracts may be satisfied by making or accepting a delivery.
an external party that has been granted an
Contract Work Hours and Safety Standards Act
A federal act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.
An annual statement filed by a life insurance company in each state where it does
Rules set by the Chicago Board of Trade for determining the invoice price of each
cost of goods manufactured (CGM)
the total cost of the
Cost of manufacture
The cost of goods manufactured for subsequent sale.
a contract in which the customer agrees
Creative Accounting Practices
Any and all steps used to play the financial numbers game, including
A decline in the ability or willingness of banks to lend.
critical success factors (CSF)
any item (such as quality, customer
Current Tax Payment Act of 1943
A federal act requiring employers to withhold income taxes from employee pay.
Davis-Bacon Act of 1931
A federal act providing wage protection to nongovernment
Existing in actual fact although not by official recognition.
design for manufacturability (DFM)
a process that is part of the project management of a new product; concerned with finding optimal solutions to minimizing product failures
Present value of $1 received at a stated future date.
Present value of a $1 future payment.
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
With respect to a project financing, an arrangement under which the sponsors of a project
economic production run (EPR)
an estimate of the number
Employee Retirement Income Security Act of 1974 (ERISA)
A federal act that sets minimum operational and funding standards for employee benefit
Equal Pay Act of 1963
A federal act requiring that both sexes receive equal pay
Refers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount.
An insurance program designed to provide funds for insured's dependents upon death of the insured, and to also conserve, as much as possible, the personal assets that the insured wants to bequeath to heirs.
A bond portfolio management strategy that involves finding the lowest cost portfolio
External Financial Statements
Corporate financial statements that have been reported on by an external independent accountant.
A financial institution that buys a firm's accounts receivables and collects the debt.
An agent who buys and sells goods on behalf of others for a commission.
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
A way of decomposing the factors that influence a security's rate of return into common and
Factor of Production
A resource used to produce a good or service. The main macroeconomic factors of production are capital and labor.
A well-diversified portfolio constructed to have a beta of 1.0 on one factor and a beta of
Sale of a firm's accounts receivable to a financial institution known as a factor.
The sale of accounts receivable to a third party, with the third party bearing
The discounting, or sale at a discount, of receivables on a nonrecourse, notification
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