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Financial Terms | |
Proprietor |
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Definition of ProprietorProprietorA single person who is the owner of an unincorporated business.
Related Terms:sole proprietorSole owner of a business which has no partners and no shareholders. The proprietor is personally liable for all the firm’s obligations. Sole proprietorshipA business owned by a single individual. The sole proprietorship pays no corporate Sole ProprietorshipAn unincorporated business owned by one person which may or may not have employees. organizational forman entity’s legal nature (for example, Seed CapitalEquity and loan capital provided for a new and/or existing business undertaking by persons other than the proprietors. Venture CapitalEquity and loan capital provided for a new and/or existing business undertaking by persons other than the proprietors. ObsolescenceThe reduction in utility of an inventory item or fixed asset. If it is an ![]() Obsolete inventoryParts not used in any current end product. organizational forman entity’s legal nature (for example, Accrued Incomeincome that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment. Accumulated Other Comprehensive IncomeCumulative gains or losses reported in shareholders' acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable Adjusted Income from ContinuingOperations Reported income from continuing operations Affirmative covenantA bond covenant that specifies certain actions the firm must take. After-tax profit marginThe ratio of net income to net sales. After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. ![]() All equity rateThe discount rate that reflects only the business risks of a project and abstracts from the All-in costTotal costs, explicit and implicit. All or noneRequirement that none of an order be executed unless all of it can be executed at the specified price. All-or-none underwritingAn arrangement whereby a security issue is canceled if the underwriter is unable allocateassign based on the use of a cost driver, a cost predictor, allocationthe systematic assignment of an amount to a recipient AllocationThe process of storing costs in one account and shifting them to other Allocation base A measure of activity or volume such as labourhours, machine hours or volume of production Allowance for bad debtsAn offset to the accounts receivable balance, against which Allowance for doubtful accountsA contra account related to accounts receivable that represents the amounts that the company expects will not be collected. Allowance for Doubtful AccountsAn estimate of the uncollectible portion of accounts receivable ![]() Allowance methodA method of adjusting accounts receivable to the amount that is expected to be collected based on company experience. approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the Asset/liability managementAlso called surplus management, the task of managing funds of a financial Asymmetric taxesA situation wherein participants in a transaction have different net tax rates. Average tax ratetaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Bad debtsThe amount of accounts receivable that is not expected to be collected. bad debtsRefers to accounts receivable from credit sales to customers Balloon maturityAny large principal payment due at maturity for a bond or loan with or without a a sinking Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair market Basic business strategiesKey strategies a firm intends to pursue in carrying out its business plan. Before-tax profit marginThe ratio of net income before taxes to net sales. Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit CommitteesA committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial Book IncomePretax income reported on the income statement. Borrower falloutIn the mortgage pipeline, the risk that prospective borrowers of loans committed to be Break-even tax rateThe tax rate at which a party to a prospective transaction is indifferent between entering Business cycleRepetitive cycles of economic expansion and recession. Business CycleFluctuations of GDP around its long-run trend, consisting of recession, trough, expansion, and peak. Business Expansion InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. Business failureA business that has terminated with a loss to creditors. business intelligence (BI) systema formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about business process reengineering (BPR)the process of combining information technology to create new and more effective Business riskThe risk that the cash flow of an issuer will be impaired because of adverse economic business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay CallAn option that gives the right to buy the underlying futures contract. Call a. An option to buy a certain quantity of a stock or commodity for a Call an optionTo exercise a call option. Call dateA date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond Call money rateAlso called the broker loan rate , the interest rate that banks charge brokers to finance Call optionAn option contract that gives its holder the right (but not the obligation) to purchase a specified Call OptionA contract that gives the holder the right to buy an asset for a call optionRight to buy an asset at a specified exercise price on or before the exercise date. Call priceThe price, specified at issuance, at which the issuer of a bond may retire part of the bond at a Call priceThe price for which a bond can be repaid before maturity under a call provision. Call protectionA feature of some callable bonds that establishes an initial period when the bonds may not be Call provisionAn embedded option granting a bond issuer the right to buy back all or part of the issue prior Call riskThe combination of cash flow uncertainty and reinvestment risk introduced by a call provision. Call swaptionA swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The CallableA financial security such as a bond with a call option attached to it, i.e., the issuer has the right to Callable bondA bond that allows the issuer to buy back the bond at a callable bondBond that may be repurchased by the issuer before maturity at specified call price. Capital allocationdecision allocation of invested funds between risk-free assets versus the risky portfolio. Capital Consumption AllowanceSee depreciation. Capital Cost Allowance (CCA)The annual depreciation expense allowed by the Canadian income tax Act. Cash flow after interest and taxesNet income plus depreciation. Cash Flow–to–Income Ratio (CFI)Adjusted cash flow provided by continuing operations Chinese wallCommunication barrier between financiers (investment bankers) and traders. This barrier is Closing purchaseA transaction in which the purchaser's intention is to reduce or eliminate a short position in Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. common-size income statementincome statement that presents items as a percentage of revenues. Confirmationhe written statement that follows any "trade" in the securities markets. Confirmation is issued Contingent LiabilityAn obligation that is dependent on the occurrence or nonoccurrence of Contingent OwnerThis is the person designated to become the new owner of a life insurance policy if the original owner dies before the life insured. Contingent pension liabilityUnder ERISA, the firm is liable to the plan participants for up to 39% of the net Corporate acquisitionThe acquisition of one firm by anther firm. Corporate bondsDebt obligations issued by corporations. Corporate charterA legal document creating a corporation. Corporate financeOne of the three areas of the discipline of finance. It deals with the operation of the firm Corporate financial managementThe application of financial principals within a corporation to create and Corporate financial planningFinancial planning conducted by a firm that encompasses preparation of both Corporate processing floatThe time that elapses between receipt of payment from a customer and the Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to cost allocationthe assignment, using some reasonable basis, Covered callA short call option position in which the writer owns the number of shares of the underlying Covered call writing strategyA strategy that involves writing a call option on securities that the investor Current Income Tax ExpenseThat portion of the total income tax provision that is based on Current liabilityThis is typically the accounts payable, short-term notes payable, and Current Tax Payment Act of 1943A federal Act requiring employers to withhold income taxes from employee pay. Deferred callA provision that prohibits the company from calling the bond before a certain date. During this Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result Deferred Tax AssetFuture tax benefit that results from (1) the origination of a temporary difference Deferred Tax LiabilityFuture tax obligation that results from the origination of a temporary Deferred taxesA non-cash expense that provides a source of free cash flow. Amount allocated during the Depreciation Allowancestax deductions that businesses can claim when they spend money on investment goods. Depreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment. depreciation tax shieldReduction in taxes attributable to the depreciation allowance. Direct stock-purchase programsThe purchase by investors of securities directly from the issuer. Disposable Incomeincome less income tax. Dividend incomeincome that a company receives in the form of dividends on stock in other companies that it holds. Double-tax agreementAgreement between two countries that taxes paid abroad can be offset against Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |