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Definition of Rings
Trading arenas located on the floor of an exchange in which traders execute orders. Sometimes called a pit.
A street-smart term that refers to the practice by many businesses
The securities regulation that exempts small public offerings, those valued at less than
Issuance of "rights" to current shareholders allowing them to purchase additional shares,
A group of investment banks that work together to sell new security offerings to
The term applied to the liberalization in 1986 of the London Stock Exchange in which trading was
A nickname for the New York Stock Exchange. Also known as The Exchange. More than 2,000
Fed regulation currently that required member banks to hold reserves against their net
Fed regulation currently requiring member banks to hold reserves against their net borrowings
Fed regulation imposing caps on the rates that banks may pay on savings and time deposits.
Capital rationing that under certain circumstances can be violated or even viewed
Schedule of depreciation rates allowed for tax purposes.
Clause causing repayment of a debt, if specified events occur or are not met.
A collection of systems and processes used to record, report and interpret business transactions.
A broad, all-inclusive term that refers to the methods and procedures
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the SECurities laws.
An alteration in the accounting methodology or estimates used in
Earnings of a firm as reported on its income statement.
A business for which a separate set of accounting records is being
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The formula assets = liabilities + Equity.
An equation that reflects the two-sided nature of a
Unintentional mistakes in financial statements. Accounted for by restating
The change in the value of a firm's foreign currency denominated accounts due to a
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
Intentional misstatements or omissions of amounts or disclosures in
The ease and quickness with which assets can be converted to cash.
The period of time for which financial statements are produced – see also financial year.
The principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements.
Accounting rate of return (ARR)
A method of investment appraisal that measures
accounting rate of return (ARR)
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
The recording of revenue when earned and expenses when
Well, frankly, accrual is not a good descriptive
A method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred.
Accrued expenses payable
expenses that have to be recorded in order for the financial statements to be accurate. Accrued expenses usually do not involve the receipt of an invoice from the company providing the goods or services.
accrued expenses payable
The account that records the short-term, noninterest-
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
acid test ratio (also called the quick ratio)
The sum of cash, accounts receivable, and short-term marketable
Acquisition of assets
A merger or consolidation in which an acquirer purchases the selling firm's assets.
Additional paid-in capital
amounts in excess of the par value or stated value that have been paid by the public to acquire stock in the company; synonymous with capital in excess of par.
Additional paid-in capital
Any payment received from investors for stock that exceeds
additional paid-in capital
Difference between issue price and par value of stock. Also called capital surplus.
Total quantity of goods and services supplied.
Aggregate Supply Curve
Combinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not.
A forceful and intentional choice and application of accounting principles
Aggressive Capitalization Policies
Capitalizing and reporting as assets significant portions of
Aggressive Cost Capitalization
Cost capitalization that stretches the flexibility within generally
American Stock Exchange (AMEX)
The SECond-largest stock exchange in the United States. It trades
Annual fund operating expenses
For investment companies, the management fee and "other expenses,"
Any possession that has value in an exchange.
A resource, recorded through a transaction, that is expected to yield a benefit to a
Something that is owned; a financial claim or a piece of property that is a store of value.
Probable future economic benefit that is obtained or controlled by an entity as a result of
Anything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.).
All things of value owned by an individual or organization.
Asset activity ratios
Ratios that measure how effectively the firm is managing its assets.
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Bond or note SECured by assets of company.
A SECurity that is collateralized by loans, leases, receivables, or installment contracts
Methods of financing in which lenders and equity investors look principally to the
Loans granted usually by a financial institution where the asset being financed constitutes the sole SECurity given to the lender.
Categories of assets, such as stocks, bonds, real estate and foreign SECurities.
Extent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position.
A bond indenture restriction that permits additional borrowing on if the ratio of assets to
The ratio of total assets to stockholder equity.
Asset for asset swap
Creditors exchange the debt of one defaulting borrower for the debt of another
Also called surplus management, the task of managing funds of a financial
The weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments.
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
A firm's investing in assets that are riskier than those that the debtholders expected.
Asset substitution problem
Arises when the stockholders substitute riskier assets for the firm's existing
An interest rate swap used to alter the cash flow characteristics of an institution's assets so as to
The ratio of net sales to total assets.
a ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets
asset turnover ratio
A broad-gauge ratio computed by dividing annual
A firm's productive resources.
Anything of value that a company owns.
Things that the business owns.
Items owned by the company or expenses that have been paid for but have not been used up.
A common element of a financial plan that describes projected capital spending and the
authorized share capital
Maximum number of shares that the company is permitted to issue, as specified in the firm’s articles of incorporation.
Automated Clearing House (ACH)
A collection of 32 regional electronic interbank networks used to
Automated Clearing House (ACH)
A banking clearinghouse that processes direct
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 accounting return
The average project earnings after taxes and depreciation divided by the average
Average cost of capital
A firm's required payout to the bondholders and to the stockholders expressed as a
Also referred to as the weighted-average life (WAL). The average number of years that each
Average Propensity to Consume
Ratio of consumption to disposable income. See also marginal propensity to consume.
A trade, quote, or market that does not originate with the dealer in question, e.g., "the bid is 98-10
1) When bond yields and prices fall, the market is said to back-up.
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from
The reorganization or liquidation of a firm that cannot pay its debts.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
The argument that expected bankruptcy costs preclude firms from being financed entirely
Basic business strategies
Key strategies a firm intends to pursue in carrying out its business plan.
Bill and Hold Practices
Products that have been sold with an explicit agreement that delivery
Bill of exchange
General term for a document demanding payment.
Brokerage firms that help to find potential buyers or sellers of large block trades.
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
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
The large clearing banks that dominate deposit taking and short-term lending in the domestic
Repetitive cycles of economic expansion and recession.
Fluctuations of GDP around its long-run trend, consisting of recession, trough, expansion, and peak.
Business Expansion Investment
The use of capital to create more money through the addition of fixed assets or through income producing vehicles.
A business that has terminated with a loss to creditors.
business intelligence (BI) system
a formal process for gathering and analyzing information and producing intelligence to meet decision making needs; requires information about
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