|Sale and lease-back
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Definition of Sale and lease-back
Sale and lease-back
sale of an existing asset to a financial institution that then leases it back to the user.
A bond covenant that restricts in some way a firm's ability to enter into
An agreement in which the owner of a property sells that property to a person or institution and then leases it back again for an agreed period and rental.
A security that is collateralized by loans, leases, receivables, or installment contracts
The fee paid on the extension date if the buyer wishes to continue the option.
Brokerage house clerical operations that support, but do not include, the trading of stocks and
An intercompany loan channeled through a bank.
A loan in which two companies in separate countries borrow each other's currency for a
1) When bond yields and prices fall, the market is said to back-up.
A market condition in which futures prices are lower in the distant delivery months than in
A method of securities distribution/ underwriting in which the securities firm agrees to sell
The lease payment at which a party to a prospective lease is indifferent between
Another term for a repo.
A lease obligation that has to be capitalized on the balance sheet.
A transaction in which the seller's intention is to reduce or eliminate a long position in a stock,
Similar to equipment trust certificates except that the lender is either the
Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.
Cost of lease financing
A lease's internal rate of return.
Days' sales in inventory ratio
The average number of days' worth of sales that is held in inventory.
Days' sales outstanding
Average collection period.
lease in which the lessor purchases new equipment from the manufacturer and leases it to the
Discounted payback period rule
An investment decision rule in which the cash flows are discounted at an
With respect to a project financing, an arrangement under which the sponsors of a project
Domestic International Sales Corporation (DISC)
A U.S. corporation that receives a tax incentive for
A cross-border lease in which the disparate rules of the lessor's and lessee's countries let
Long-term, non-cancelable lease.
Foreign Sales Corporation (FSC)
A special type of corporation created by the Tax Reform Act of 1984 that
A method for hedging price risk which involves an agreement between a lender and an investor
See: financial lease.
Also called rental lease. lease in which the lessor promises to maintain and insure the
The sale of an asset in exchange for a specified series of payments (the installments).
A long-term rental agreement, and a form of secured long-term debt.
The payment per period stated in a lease contract.
A lease arrangement under which the lessor borrows a large proportion of the funds needed
Limitation on merger, consolidation, or sale
A bond covenant that restricts in some way a firm's ability to
An option that allows the buyer to choose as the option strike price any price of the
The payment per period stated in a lease contract.
Mortgage-Backed Securities Clearing Corporation
A wholly owned subsidiary of the Midwest Stock
Securities backed by a pool of mortgage loans.
Situation in which the terms of an offering are determined by negotiation between the issuer
A lease arrangement under which the lessee is responsible for all property taxes, maintenance
Normal backwardation theory
Holds that the futures price will be bid down to a level below the expected
A transaction in which the seller's intention is to create or increase a short position in a given
Short-term, cancelable lease. A type of lease in which the period of contract is less than the
The length of time it takes to recover the initial cost of a project, without regard to the time value of money.
Related: retention rate.
Price/sales ratio (PS Ratio)
Determined by dividing current stock price by revenue per share (adjusted for stock splits).
Purchase and sale
A method of securities distribution in which the securities firm purchases the securities
Safe harbor lease
A lease to transfer tax benefits of ownership (depreciation and debt tax shield) from the
The fee charged by a mutual fund when purchasing shares, usually payable as a commission to
A key input to a firm's financial planning process. External sales forecasts are based on
An arrangement whereby a firm leases its own equipment, such as IBM leasing its own
Selling a security that the seller does not own but is committed to repurchasing eventually. It is
Stripped mortgage-backed securities (SMBSs)
Securities that redistribute the cash flows from the
A method for hedging price risk that utilizes debt-market instruments, such as interest rate
The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.
Also called a swap assignment, a transaction that ends one counterparty's role in an interest rate
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
Terms of sale
Conditions on which a firm proposes to sell its goods services for cash or credit.
A contract that qualifies as a valid lease agreement under the Internal Revenue code.
Wholesale mortgage banking
The purchasing of loans originated by others, with the servicing rights
NET SALES (revenue)
The amount sold after customersâ€™ returns, sales discounts, and other allowances are taken away from
NUMBER OF DAYS SALES IN RECEIVABLES
(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that havenâ€™t been collected yet.
RATIO OF NET INCOME TO NET SALES
A ratio that shows how much net income (profit) a company made on each dollar of net sales. Hereâ€™s the formula:
RATIO OF NET SALES TO NET INCOME
A ratio that shows how much a company had to collect in net sales to make a dollar of profit. Figure it this way:
Cost of sales
The manufacture or purchase price of goods sold in a period or the cost of providing a service.
The retrospective process of measuring performance, comparing it with plan and taking corrective action.
A method of investment appraisal that calculates the number of years taken for the cash flows from an investment to cover the initial capital outlay.
The mix of product/services offered by the business, each of which may be aimed at different customers, with each product/service having different prices and costs.
The cost of improvements made to property that the company leases.
Amounts earned by the company from the sale of merchandise or services; often used interchangeably with the term revenue.
A contra account that offsets revenue. It represents the amount of the discounts for early payment allowed on sales.
A journal used to record the transactions that result in a credit to sales.
A contra account that offsets revenue. It represents the amount of sales made that were later returned.
return on sales
This ratio equals net income divided by sales revenue.
The number of years necessary for the net cash flows of an
a streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires
a system using transfer prices; see transfer
the time it takes an investor to recoup an
the relative combination of quantities of sales of the various products that make up the total sales of a company
sales value at split-off allocation
a method of assigning joint cost to joint products that uses the relative sales values of the products at the split-off point as the proration basis; use of this method requires that all joint products
Short sale, short position
The sale of a security or financial instrument not
A lease in which the lessee obtains some ownership rights over the asset
The total sales recorded prior to sales discounts and returns.
This is any upgrade to leased property by a lessee that will be
The offsetting of a current year loss against the reported taxable
Total revenue, less the cost of sales returns, allowances, and discounts.
The rental of an asset from a lessor, but not under terms that would
A capital budgeting analysis method that calculates the amount of
A reduction in a price that is allowed by the seller, due to a problem
A reduction in the price of a product or service that is offered by the
Sales value at split-off
A cost allocation methodology that allocates joint costs to joint
Long-term rental agreement.
Time until cash flows recover the initial investment of the project.
percentage of sales models
Planning model in which sales forecasts are the driving variables and most other variables are
Fraction of earnings retained by the firm.
terms of sale
Credit, discount, and payment terms offered on a sale.
A tax levied as a percentage of retail sales.
Accounting and Auditing Enforcement Release (AAER)
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
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