|Residual income (RI)|
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Definition of Residual income (RI)
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
Rule in bankruptcy proceedings whereby senior creditors are required to be paid in full
Goods may be returned to the seller by the purchaser without restrictions.
Intentional misstatements or omissions of amounts or disclosures in
The period of time for which financial statements are produced – see also financial year.
income 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.
Cumulative gains or losses reported in shareholders'
This doctrine says that a nation is sovereign within its own borders and its domestic
a measure of the demands on activities and,
Operations Reported income from continuing operations
The entries needed at the end of an accounting period to properly state certain account balances.
IRS rules used to allocate income on export sales to a foreign sales corporation.
Very early orders for materials before the completion
a logical step-by-step problem-solving technique
An arrangement whereby a security issue is canceled if the underwriter is unable
Certificates issued by a U.S. depositary bank, representing foreign
An option that may be exercised at any time up to and including the expiration date.
An option that can be exercised any time until its
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign
American Stock Exchange (AMEX)
The second-largest stock exchange in the United States. It trades
An option contract that can be exercised at any time between the date of purchase and
Annualized holding period return
The annual rate of return that when compounded t times, would have
The time between each payment under an annuity.
A right of shareholders in a merger to demand the payment of a fair price for their shares, as
a budgeted maximum allowable expenditure
Formal request for funds for capital investment project.
Arbitrage-free option-pricing models
Yield curve option-pricing models.
Arbitrage Pricing Theory (APT)
An alternative model to the capital asset pricing model developed by
Arithmetic average (mean) rate of return
Arithmetic mean return.
Arithmetic mean return
An average of the subperiod returns, calculated by summing the subperiod returns
Arm's length price
The price at which a willing buyer and a willing unrelated seller would freely agree to
A dealer's price to sell a security; also called the offer price.
Bond or note secured by assets of company.
A security that is collateralized by loans, leases, receivables, or installment contracts
Asset pricing model
A model for determining the required rate of return on an asset.
Asset pricing model
A model, such as the Capital Asset Pricing Model (CAPM), that determines the required
The amount of total risk that can be eliminated by diversification by
Assuris is a not for profit organization that protects Canadian policyholders in the event that their life insurance company should become insolvent. Their role is to protect policyholders by minimizing loss of benefits and ensuring a quick transfer of their policies to a solvent company where their benefits will continue to be honoured. Assuris is funded by the life insurance industry and endorsed by government. If you are a Canadian citizen or resident, and you purchased a product from a member life insurance company in Canada, you are protected by Assuris.
Information that is known to some people but not to other people.
A situation wherein participants in a transaction have different net tax rates.
attribute-based costing (ABC II)
an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute
The tendency of stocks preferred by the dividend discount model to share certain equity
Legislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you.
the right (usually by virtue of position or rank) to use resources to accomplish a task or achieve an objective
authorized share capital
Maximum number of shares that the company is permitted to issue, as specified in the firm’s articles of incorporation.
Number of shares authorized for issuance by a firm's corporate charter.
The number of shares of stock that the company is legally authorized to sell.
Automated Clearing House (ACH)
A collection of 32 regional electronic interbank networks used to
Automated Clearing House (ACH)
A banking clearinghouse that processes direct
Automated storage/retrieval system
A racking system using automated systems
A debt or equity security not classified as a held-to-maturity security or a trading security. Can be classified as a current or noncurrent investment depending on the intended holding period.
Average Amortization Period
The average useful life of a company's collective amortizable asset base.
Average Collection Period
Average number of days necessary to receive cash for the sale of
Average collection period, or days' receivables
The ratio of accounts receivables to sales, or the total
The average time to maturity of securities held by a mutual fund. Changes in interest rates
Any large principal payment due at maturity for a bond or loan with or without a a sinking
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
Gives the lessee the option to purchase the asset at a price below fair market
Contracts with trigger points that, when crossed, automatically generate buying or selling of
Price expressed in terms of yield to maturity or annual rate of return.
The uncertainty about the basis at the time a hedge may be lifted. Hedging substitutes basis risk for
risk of a firm measured from the standpoint of an investor who holds a highly diversified portfolio.
Biased expectations theories
Related: pure expectations theory.
This is the quoted bid, or the highest price an investor is willing to pay to buy a security. Practically
Bill of materials
A listing of all the materials and quantities that go to make up a completed product.
bill of materials
a document that contains information about
Bill of materials
An itemization of the parts and subassemblies required to create a
Bill of materials (BOM)
A listing of all parts and subassemblies required to produce one
Binomial option pricing model
An option pricing model in which the underlying asset can take on only two
Black-Scholes option-pricing model
A model for pricing call options based on arbitrage arguments that uses
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 Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the
Pretax income reported on the income statement.
Breeder bill of materials
A bill of material that accounts for the generation and
Interim financing of one sort or another used to solidify a position until more permanent
A short term loan to cover the immediate cash requirements until permanent financing is received.
The large clearing banks that dominate deposit taking and short-term lending in the domestic
the difference between total actual overhead
Words used to describe investor attitudes. Bullish refers to an optimistic outlook while
business process reengineering (BPR)
the process of combining information technology to create new and more effective
The risk that the cash flow of an issuer will be impaired because of adverse economic
A flexible benefits plan authorized under the Internal Revenue
cafeteria plan a “menu” of fringe benefit options that include
cash or nontaxable benefits
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a call provision.
The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
Capital asset pricing model (CAPM)
An economic theory that describes the relationship between risk and
Capital Asset Pricing Model (CAPM)
A model for estimating equilibrium rates of return and values of
capital asset pricing model (CAPM)
Theory of the relationship between risk and return which states that the expected risk
Costs that increase with increases in the level of investment in current assets.
Cash Flow–to–Income Ratio (CFI)
Adjusted cash flow provided by continuing operations
Holding other things constant.
Change in Accounting Principle
A change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures
The market model applied to a single security. The slope of the line is a security's beta.
Child Insurance Rider (CIR)
Insurance or insurability provided on current or future children of insured.
Bond price excluding accrued interest.
Clearing House Automated Payments System (CHAPS)
A computerized clearing system for sterling funds
Clearing house / Clearinghouse
An adjunct to a futures exchange through which transactions executed its floor are settled by a
Clearing House Interbank Payments System (CHIPS)
An international wire transfer system for high-value
A member firm of a clearing house. Each clearing member must also be a member of the
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