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Definition of Real assets
Identifiable assets, such as buildings, equipment, patents, and trademarks, as distinguished from a
assets used to produce goods and services.
services are readily convertible into known amounts of cash or claims to cash.
Claims on real assets.
An asset whose value depends on particular physical properties. These i nclude reproducible
Decision as to which real assets the firm should acquire.
Claims to the income generated by real assets. Also called securities.
Decision as to how to raise the money to pay for investments in real assets.
Options embedded in real assets.
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Money after-tax rate of return minus the inflation rate.
A firm's productive resources.
A common element of a financial plan that describes projected capital spending and the
Value of cash, accounts receivable, inventories, marketable securities and other assets that
Acquisition of another company by purchase of its assets in exchange for cash or stock.
Value of property, equipment and other capital assets minus the depreciation. This is an
The difference between total assets on the one hand and current liabilities and noncapitalized longterm
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Publicly traded assets
assets that can be traded in a public market, such as the stock market.
Current assets minus inventories.
Wealth that can be represented in financial terms, such as savings account balances, financial
Real cash flow
A cash flow is expressed in real terms if the current, or date 0, purchasing power of the cash
Real exchange rates
Exchange rates that have been adjusted for the inflation differential between two countries.
Real interest rate
The rate of interest excluding the effect of inflation; that is, the rate that is earned in terms
The bid and offer prices at which a dealer could do "size." Quotes in the brokers market may
A real time stock or bond quote is one that states a security's most recent offer to sell or bid (buy).
Realized compound yield
Yield assuming that coupon payments are invested at the going market interest
The return that is actually earned over a given time period.
REIT (real estate investment trust)
real estate investment trust, which is similar to a closed-end mutual
REMIC (real estate mortgage investment conduit)
A pass-through tax entity that can hold mortgages
A tangible asset with physical properties that can be reproduced, such as a building or
assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Return on assets (ROA)
Indicator of profitability. Determined by dividing net income for the past 12 months
Return on total assets
The ratio of earnings available to common stockholders to total assets.
Anything of value that a company owns.
Cash, things that will be converted into cash within a year (such as accounts receivable), and inventory.
RATE OF RETURN ON TOTAL ASSETS
The percentage return or profit that management made on each dollar of assets. The formula is:
Things that the business owns.
Amounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments.
Things that the business owns and are part of the business infrastructure – fixed assets may be
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
Tangible fixed assets
Physical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc.
Items owned by the company or expenses that have been paid for but have not been used up.
assets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises.
Current refers to cash and those assets that will be turned
An informal term that refers to the variety of long-term operating
return on assets (ROA)
Although there is no single uniform practice for
Fixed Assets Turnover Ratio
A measure of the utilization of a company's fixed assets to
Real Interest Rate
The rate of interest paid on an investment adjusted for inflation
Return on Total Assets Ratio
A measure of the percentage return earned on the value of the
Total Debt to Total Assets Ratio
See debt ratio
approximated net realizable value at split-off allocation
a method of allocating joint cost to joint products using a
net realizable value approach
a method of accounting for by-products or scrap that requires that the net realizable value of these products be treated as a reduction in the cost of the primary products; primary product cost may be reduced by decreasing either
net realizable value at split-off allocation
a method of allocating joint cost to joint products that uses, as the proration base, sales value at split-off minus all costs necessary
real microprofit center
a center whose output has a market value
realized value approach
a method of accounting for byproducts or scrap that does not recognize any value for these products until they are sold; the value recognized
Net realizeable value
The expected revenue to be gained from the sale of an item or
A cluster of accounts that are listed after fixed assets on the balance sheet,
real interest rate
Rate at which the purchasing power of an investment increases.
real value of $1
Purchasing power–adjusted value of a dollar.
Exchange Rate, Real
The nominal exchange rate corrected for price level differences.
Interest Rate, Real
Nominal interest rate less expected inflation.
Measured in base year, or constant, dollars. Contrast with nominal.
Real Business Cycle Theory
Belief that business cycles arise from real shocks to the economy, such as technology advances and natural resource discoveries, and have little to do with monetary policy.
Real Exchange Rate
Exchange rate adjusted for relative price levels.
GDP expressed in base-year dollars, calculated by dividing nominal GDP by a price index.
Income expressed in base-year dollars, calculated by dividing nominal income by a price index.
Real Money Supply
Money supply expressed in base-year dollars, calculated by dividing the money supply by a price index.
Real Rate of Interest
See interest rate, real.
Wage expressed in base-year dollars, calculated by dividing the money wage by a price index.
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
Real Actions (Earnings) Management
Involves operational steps and not simply acceleration
Realized Gains and Losses
Increases or decreases in the fair value of an asset or a liability that
A revenue transaction where goods and services are exchanged for cash or
Cash and other company assets that can be readily turned into cash within one year.
Land, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation.
Longer-Term Fixed Assets
assets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied.
Net Realizable Value
Selling price of an asset less expenses of bringing the asset into a saleable state and expenses of the sale.
assets, the title of which are held personally rather than in the name of some other legal entity.
Categories of assets, such as stocks, bonds, real estate and foreign securities.
Long-lived property owned by a firm that is used by a firm in the production of its income.
Net amount that could be realized by selling the assets of a firm after paying the debt.
realigning the proportions of assets in a portfolio as needed.
A ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula:
Net proceeds that would be realized by selling the firm’s assets and paying off its creditors.
The loss in purchasing power due to inflation eroding the real value of financial assets such as cash.
Aggressive Capitalization Policies
Capitalizing and reporting as assets significant portions of
A contra- or reduction account to deferred tax assets.
Contract granting use of real estate, equipment, or other fixed assets for a specified time in exchange for payment, usually in the form of rent. The owner of the leased property is called the lessor, the user the lessee.
Lease (Credit Insurance)
Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee.
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