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Definition of Pro-Forma Earnings
Reported net income with selected nonrecurring items of revenue or gain
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
earnings of a firm as reported on its income statement.
Cash flow provided by operating
Net income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss.
The ratio of net income to net sales.
Conflicts of interest among stockholders, bondholders, and managers.
Conflicts of interest between the firm’s owners and managers.
An equation determining aggregate output as a function of aggregate inputs such as labor and capital.
A clause in a shareholders agreement preventing a company from issuing additional shares, without allowing the current shareholders the opportunity to participate in the offering to avoid dilution of their percentage ownership.
Specific sections and rules of the 1933 Act and 1934 Act that are
a budgeted maximum allowable expenditure
formal request for funds for capital investment project.
a method of allocating joint cost to joint products using a
Arises when the stockholders substitute riskier assets for the firm's existing
Information that is known to some people but not to other people.
Average Propensity to Consume
Ratio of consumption to disposable income. See also marginal propensity to consume.
Average Propensity to Save
Ratio of saving to disposable income. See also marginal propensity to save.
BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in
Base probability of loss
The probability of not achieving a portfolio expected return.
basic earnings per share (EPS)
This important ratio equals the net
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
Before-tax profit margin
The ratio of net income before taxes to net sales.
a listing of service departments in an order that begins with the one providing the most service
Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees
A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
business process reengineering (BPR)
the process of combining information technology to create new and more effective
an incidental output of a joint process; it is salable,
A product that is an ancillary part of the primary production process, having
A material created incidental to a production process, which can be
A feature of some callable bonds that establishes an initial period when the bonds may not be
An embedded option granting a bond issuer the right to buy back all or part of the issue prior
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
Committee, AIMR Performance Presentation Standards Implementation Committee
The Association for Investment Management and Research (AIMR)'s Performance Presentation Standards Implementation
Consumer Credit Protection Act
A federal Act specifying the proportion of
an ongoing process of enhancing employee task performance, level of product quality, and level of company service through eliminating nonvalue-added activities to reduce lead time, making products
The profit made by a division after deducting only those expenses that can be controlled by the
A project with a negative initial cash flow (cash outflow), which is expected to be
A measure of earnings that includes only the results of the primary operating
Corporate processing float
The time that elapses between receipt of payment from a customer and the
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
cost of production report
a process costing document that
Cost Plus Estimated Earnings in Excess of Billings
Revenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts
Cost–volume–profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
analysis a procedure that examines
Creditor Proof Protection
The creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules.
A statistical methodology applied to a set of firms at a particular point in time.
Cumulative probability distribution
A function that shows the probability that the random variable will
Debt service parity approach
An analysis wherein the alternatives under consideration will provide the firm
Design In software development, a detailed step-by-step plan for completing the software.
A conception of the way a stock's price changes that assumes that the price takes on all
diluted earnings per share (EPS)
This measure of earnings per share
A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.
Direct stock-purchase programs
The purchase by investors of securities directly from the issuer.
Net income for the company during the period.
In general, refers to a company's total sales less cost of sales and operating expenses, including interest and income tax.
earnings before interest and income tax (EBIT)
A measure of profit that
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
The active manipulation of earnings toward a predetermined target.
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.
Earnings retention ratio
Positive or negative differences from the consensus forecast of earnings by institutions
The ratio of earnings per share after allowing for tax and interest payments on fixed interest
EBBS - Earnings before the bad stuff
An acronym attributed to a member of the Securities and
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
The real flow of cash that a firm could pay out forever in the absence of any change in
economic production run (EPR)
an estimate of the number
A program, such as social security, under which everyone meeting the eligibility requirements is entitled to receive benefits from the program, so that costs are not known in advance.
equivalent units of production (EUP)
an approximation of the number of whole units of output that could have been
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
The official seizure by a government of private property. Any government has the right to
Factor of Production
A resource used to produce a good or service. The main macroeconomic factors of production are capital and labor.
Fair price provision
Farm Improvement and Marketing Cooperatives Loans Act
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
Formalized Line of Credit
A contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year.
Fully diluted earnings per shares
earnings per share expressed as if all outstanding convertible securities
Future-Oriented Financial Information
Information about prospective results of operations, financial position and/or changes in financial position, based on assumptions about future economic conditions and courses of action. Future-oriented financial information is presented as either a forecast or a projection.
Good delivery and settlement procedures
Refers to PSA Uniform Practices such as cutoff times on delivery
grade (of product or service)
the addition or removal of product
Gross Domestic Product
Total output of final goods and services produced within a country during a year.
Gross domestic product (GDP)
The market value of goods and services produced over time including the
gross margin, or gross profit
This first-line measure of profit
Gross National Product
Total output of final goods and services produced by a country's citizens during a year.
Gross national product (GNP)
Measures and economy's total income. It is equal to GDP plus the income
The profit a company makes before expenses and taxes are taken away.
The difference between the price at which goods or services are sold and the cost of sales.
The result of subtracting cost of goods sold from sales. Synonymous with gross margin.
Revenue less cost of goods sold.
Gross profit margin
Gross profit divided by sales, which is equal to each sales dollar left over after paying
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