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Definition of SBIC
Small Business Investment Company.
Key strategies a firm intends to pursue in carrying out its Business plan.
Large and creditworthy Company.
Repetitive cycles of economic expansion and recession.
A Business that has terminated with a loss to creditors.
The risk that the cash flow of an issuer will be impaired because of adverse economic
Related: Unsystematic risk
Arrangement whereby the shareholders of a project receive output free of
DTC is a user-owned securities depository which accepts deposits of
Automatic reInvestment of shareholder dividends in more shares of a
The return one can expect to earn on an Investment. See: capital asset
The acquisition abroad of physical assets such as plant and equipment, with
The options to identify additional, more valuable Investment opportunities
A pure Investment product in which a life Company agrees, for a
A corporation that owns enough voting stock in another firm to control management and
Loan made by one unit of a corporation to another unit of the same corporation.
Transaction carried out between two units of the same corporation.
Related: financial analysts
Financial intermediaries who perform a variety of services, including aiding in the sale of
Decisions concerning the asset side of a firm's balance sheet, such as the decision to
Investment grade bonds
A bond that is assigned a rating in the top four categories by commercial credit
The revenue from a portfolio of invested assets.
Also called a portfolio manager and money manager, the individual who manages a
Investment product line (IPML)
The line of required returns for Investment projects as a function of beta
Investment tax credit
Proportion of new capital Investment that can be used to reduce a Company's tax bill
A closed-end fund regulated by the Investment Company Act of 1940. These funds have a
As a discipline, the study of financial securities, such as stocks and bonds, from the investor's
Investments that a regulated entity is permitted to make under the rules and regulations
Mutually exclusive investment decisions
Investment decisions in which the acceptance of a project
Gross, or total, Investment minus depreciation.
Net present value of future investments
The present value of the total sum of NPVs expected to result from
Passive investment strategy
See: passive management.
Passive investment management
Buying a well-diversified portfolio to represent a broad-based market
The rate at which an investor assumes interest payments made on a debt security can be
The risk that proceeds received in the future will have to be reinvested at a lower potential
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
Return on investment (ROI)
Generally, book income as a proportion of net book value.
Short-term investment services
Services that assist firms in making short-term Investments.
The tendency of Small firms (in terms of total market capitalization) to outperform the
Small issues exemption
Securities issues that involve less than $1.5 million are not required to file a
The mirror image of the asset substitution problem, wherein stockholders refuse
Unit investment trust
Money invested in a portfolio whose composition is fixed for the life of the fund.
A portfolio of zero net value established by buying and shorting component
RETURN ON INVESTMENT (ROI)
In its most basic form, the rate of return equals net income divided by the amount of money invested. It can be applied to a particular product or piece of equipment, or to a Business as a whole.
A division or unit of an organization that is responsible for achieving an adequate return on
Return on investment (ROI)
The net profit after tax as a percentage of the shareholders’ Investment in the Business.
capital investment analysis
Refers to various techniques and procedures
return on investment (ROI)
A very general concept that refers to some
See asset-specific risk
The commitment of funds (capital) in anticipation of an increased
business intelligence (BI) system
a 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
an activity that is necessary for the operation of the Business but for which a customer would not want to pay
Internet business model
a model that involves
a responsibility center in which the manager
a judgment about which assets will be
limited liability company
an organizational form that is a hybrid of the corporate and partnership organizational
the process of gathering information
an assumption made about the rates of return that will be earned by intermediate cash flows from a capital project; NPV and PI assume reInvestment at the discount rate; IRR assumes reInvestment at the IRR
return on investment
a ratio that relates income generated
an individual or firm engaged in a high or moderate degree of conversion that results in service output
A Company that retains control over one or more other companies.
A Company that is controlled by another Company through ownership
company cost of capital
Expected rate of return demanded by investors in a Company, determined by the average risk of the Company’s assets and operations.
Bonds rated Baa or above by Moody’s or BBB or above by Standard & Poor’s.
operating risk (business risk)
Risk in firm’s operating income.
Fluctuations of GDP around its long-run trend, consisting of recession, trough, expansion, and peak.
Middleman between a corporation issuing new securities and the public. The middleman buys the securities issue outright and then resells it to customers. Also called an underwriter.
Expenditures on capital goods including new housing. Financial ''Investments" and sales of existing assets are not included.
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase Investment spending.
Investment spending minus depreciation.
Political Business Cycle
A Business cycle caused by policies undertaken to help a government be re-elected.
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.
Business Expansion Investment
The use of capital to create more money through the addition of fixed assets or through income producing vehicles.
Money used to purchase fixed assets for a Business, such as land, buildings, or machinery. Also, money invested in a Business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses.
Assets acquired to create money. May include plant, machinery and equipment, shares of another Company etc.
Company engaged in making loans to individuals or Businesses. Unlike a bank, it does not receive deposits from the public.
High-Risk Small Business
Firm viewed as being particularly subject to risk from an investors perspective.
A firm licensed to sell insurance to the public.
Organization usually combined with a commercial bank, which is engaged as a trustee for individuals or Businesses in the administration of Trust funds, estates, custodial arrangements, stock transfer and registration, and other related services.
guaranteed investment certificate (GIC)
A GIC is an Investment that gives you a guaranteed rate of return over a fixed period of time, usually between 30 days and 5 years. GICs are available from banks, trust companies, and other financial institutions.
qualified investments (Canada)
Qualified Investments is the term used for Investments that can be held in an RSP. These Investments generally include:
Regular Investment Plan (RIP)
A plan under which you may make regular deposits of the same amount to your Mutual Funds account once a month, once every 2 weeks, or once a week. You can also make regular deposits up to four times a month on any dates you choose.
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.
Through equity Investment, investors gain part ownership of the corporation. The primary type of equity Investment is corporate stock.
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