Financial Terms | |
SBIC |
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Definition of SBICSBICSmall Business Investment Company.
Related Terms:Basic business strategiesKey strategies a firm intends to pursue in carrying out its Business plan. Blue-chip companyLarge and creditworthy Company. Business cycleRepetitive cycles of economic expansion and recession. Business failureA Business that has terminated with a loss to creditors. Business riskThe risk that the cash flow of an issuer will be impaired because of adverse economic Company-specific riskRelated: Unsystematic risk Cost company arrangementArrangement whereby the shareholders of a project receive output free of Depository Trust Company (DTC)DTC is a user-owned securities depository which accepts deposits of Dividend reinvestment plan (DRP)Automatic reInvestment of shareholder dividends in more shares of a Expected return on investmentThe return one can expect to earn on an Investment. See: capital asset Foreign direct investment (FDI)The acquisition abroad of physical assets such as plant and equipment, with Future investment opportunitiesThe options to identify additional, more valuable Investment opportunities Guaranteed investment contract (GIC)A pure Investment product in which a life Company agrees, for a Holding companyA corporation that owns enough voting stock in another firm to control management and Intercompany loanLoan made by one unit of a corporation to another unit of the same corporation. Intercompany transactionTransaction carried out between two units of the same corporation. Investment analystsRelated: financial analysts Investment bankFinancial intermediaries who perform a variety of services, including aiding in the sale of Investment decisionsDecisions concerning the asset side of a firm's balance sheet, such as the decision to Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Investment incomeThe revenue from a portfolio of invested assets. Investment managerAlso 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 creditProportion of new capital Investment that can be used to reduce a Company's tax bill Investment trustA closed-end fund regulated by the Investment Company Act of 1940. These funds have a Investment valueRelated:straight value. InvestmentsAs a discipline, the study of financial securities, such as stocks and bonds, from the investor's Legal investmentsInvestments that a regulated entity is permitted to make under the rules and regulations Mutually exclusive investment decisionsInvestment decisions in which the acceptance of a project Net investmentGross, or total, Investment minus depreciation. Net present value of future investmentsThe present value of the total sum of NPVs expected to result from Passive investment strategySee: passive management. Passive investment managementBuying a well-diversified portfolio to represent a broad-based market Reinvestment rateThe rate at which an investor assumes interest payments made on a debt security can be Reinvestment riskThe 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 servicesServices that assist firms in making short-term Investments. Small-firm effectThe tendency of Small firms (in terms of total market capitalization) to outperform the Small issues exemptionSecurities issues that involve less than $1.5 million are not required to file a Underinvestment problemThe mirror image of the asset substitution problem, wherein stockholders refuse Unit investment trustMoney invested in a portfolio whose composition is fixed for the life of the fund. Zero-investment portfolioA 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. Investment centreA 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 analysisRefers to various techniques and procedures return on investment (ROI)A very general concept that refers to some Companyspecific RiskSee asset-specific risk InvestmentThe commitment of funds (capital) in anticipation of an increased business intelligence (BI) systema 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 business-value-added activityan activity that is necessary for the operation of the Business but for which a customer would not want to pay Internet business modela model that involves investment centera responsibility center in which the manager investment decisiona judgment about which assets will be limited liability companyan organizational form that is a hybrid of the corporate and partnership organizational postinvestment auditthe process of gathering information reinvestment assumptionan 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 investmenta ratio that relates income generated service companyan individual or firm engaged in a high or moderate degree of conversion that results in service output Parent companyA Company that retains control over one or more other companies. Subsidiary companyA Company that is controlled by another Company through ownership company cost of capitalExpected rate of return demanded by investors in a Company, determined by the average risk of the Company’s assets and operations. investment gradeBonds 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. Business CycleFluctuations of GDP around its long-run trend, consisting of recession, trough, expansion, and peak. Investment BankerMiddleman 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. Investment SpendingExpenditures on capital goods including new housing. Financial ''Investments" and sales of existing assets are not included. Investment Tax CreditA reduction in taxes offered to firms to induce them to increase Investment spending. Net InvestmentInvestment spending minus depreciation. Political Business CycleA Business cycle caused by policies undertaken to help a government be re-elected. Real Business Cycle TheoryBelief 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 InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. Capital InvestmentsMoney 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. Company AcquisitionsAssets acquired to create money. May include plant, machinery and equipment, shares of another Company etc. Finance CompanyCompany engaged in making loans to individuals or Businesses. Unlike a bank, it does not receive deposits from the public. High-Risk Small BusinessFirm viewed as being particularly subject to risk from an investors perspective. Insurance CompanyA firm licensed to sell insurance to the public. Trust CompanyOrganization 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. Equity investmentThrough equity Investment, investors gain part ownership of the corporation. The primary type of equity Investment is corporate stock. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |