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Financial Terms | |
Short-term tax exempts |
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Definition of Short-term tax exemptsShort-term tax exemptsshort-term securities issued by states, municipalities, local housing agencies, and
Related Terms:After-tax profit marginThe ratio of net income to net sales. After-tax real rate of returnMoney after-tax rate of return minus the inflation rate. Asymmetric taxesA situation wherein participants in a transaction have different net tax rates. Average tax ratetaxes as a fraction of income; total taxes divided by total taxable income. average tax rateTotal taxes owed divided by total income. Before-tax profit marginThe ratio of net income before taxes to net sales. Break-even tax rateThe tax rate at which a party to a prospective transaction is indifferent between entering ![]() Cash flow after interest and taxesNet income plus depreciation. Coefficient of determinationA measure of the goodness of fit of the relationship between the dependent and coefficient of determinationa measure of dispersion that Corporate tax viewThe argument that double (corporate and individual) taxation of equity returns makes Corporate taxable equivalentRate of return required on a par bond to produce the same after-tax yield to Credit TermsConditions under which credit is extended by a lender to a borrower. Current Income Tax ExpenseThat portion of the total income tax provision that is based on Current Tax Payment Act of 1943A federal Act requiring employers to withhold income taxes from employee pay. Deferred Income Tax ExpenseThat portion of the total income tax provision that is the result ![]() Deferred Tax AssetFuture tax benefit that results from (1) the origination of a temporary difference Deferred Tax LiabilityFuture tax obligation that results from the origination of a temporary Deferred taxesA non-cash expense that provides a source of free cash flow. Amount allocated during the Depreciation tax shieldThe value of the tax write-off on depreciation of plant and equipment. depreciation tax shieldReduction in taxes attributable to the depreciation allowance. Deterministic modelsLiability-matching models that assume that the liability payments and the asset cash DisintermediationWithdrawal of funds from a financial institution in order to invest them directly. Double-tax agreementAgreement between two countries that taxes paid abroad can be offset against earnings before interest and income tax (EBIT)A measure of profit that Earnings before interest and taxes (EBIT)A financial measure defined as revenues less cost of goods sold Earnings before interest and taxes (EBIT)The operating profit before deducting interest and tax. Earnings before interest, taxes, depreciation and amortization (EBITDA)The operating profit before deducting interest, tax, depreciation and amortization. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working EBDDT - Earnings before depreciation and deferred taxesThis measure is used principally by Effective Tax RateThe total tax provision divided by pretax book income from continuing Electronic Federal Tax Payment Systems (EFTPS)An electronic funds transfer system used by businesses to remit taxes to the government. Equivalent taxable yieldThe yield that must be offered on a taxable bond issue to give the same after-tax Euro-medium term note (Euro-MTN)A non-underwritten Euronote issued directly to the market. Euro- Federal Unemployment Tax Act (FUTA)A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a Financial intermediariesInstitutions that provide the market function of matching borrowers and lenders or financial intermediaryFirm that raises money from many small investors and provides financing to businesses or other Financial IntermediaryAny institution, such as a bank, that takes deposits from savers and loans them to borrowers. Financial IntermediationThe process whereby financial intermediaries channel funds from lender/savers to borrower/spenders. Flexible TermOptional periods of time which the conditions of a contract will be carried out. Foreign tax creditHome country credit against domestic income tax for foreign taxes paid on foreign Imputation tax systemArrangement by which investors who receive a dividend also receive a tax credit for INCOME TAXWhat the business paid to the IRS. Income taxA government tax on the income earned by an individual or corporation. Income Tax ExpenseSee income tax provision. Income Tax ProvisionThe expense deduction from pretax book income reported on the Indirect Taxestaxes paid by consumers when they buy goods and services. A sales tax is an example. Inflation TaxThe loss in purchasing power due to inflation eroding the real value of financial assets such as cash. Interest equalization taxtax on foreign investment by residents of the U.S. which was abolished in 1974. Interest tax shieldThe reduction in income taxes that results from the tax-deductibility of interest payments. interest tax shieldtax savings resulting from deductibility of interest payments. Intermarket sectorspread The spread between the interest rate offered in two sectors of the bond market for Intermarket spread swapsAn exchange of one bond for another based on the manager's projection of a IntermediaryAn independent third party that may act as a mediator during negotiations. Intermediate GoodA good used in producing another good. Intermediate-termTypically 1-10 years. IntermediationInvestment through a financial institution. Related: disintermediation. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Limited-tax general obligation bondA general obligation bond that is limited as to revenue sources. Liquidity theory of the term structureA biased expectations theory that asserts that the implied forward Long-termIn accounting information, one year or greater. Long-term assetsValue of property, equipment and other capital assets minus the depreciation. This is an Long-term debtAn obligation having a maturity of more than one year from the date it was issued. Also Long-term debtA debt for which payments will be required for a period of more than Long Term DebtLiability due in a year or more. Long-term debt/capitalizationIndicator of financial leverage. Shows long-term debt as a proportion of the Long-term debt ratioThe ratio of long-term debt to total capitalization. Long-term debt to equity ratioA capitalization ratio comparing long-term debt to shareholders' equity. Long-term financial planFinancial plan covering two or more years of future operations. Long-term liabilitiesAmount owed for leases, bond repayment and other items due after 1 year. LONG-TERM LIABILITIESBills that are payable in more than one year, such as a mortgage or bonds. Long-term liabilitiesAmounts owing after more than one year. Longer-Term Fixed AssetsAssets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied. Margin Tax RateThe tax rate applicable to the last unit of income. Marginal tax rateThe tax rate that would have to be paid on any additional dollars of taxable income earned. marginal tax rateAdditional taxes owed per dollar of additional income. Marginal Tax RatePercent of an increase in income paid in tax. Medium-term noteA corporate debt instrument that is continuously offered to investors over a period of Other long term liabilitiesValue of leases, future employee benefits, deferred taxes and other obligations Payroll tax expenseThe amount of tax associated with salaries that an employer pays to governments (federal, state, and local). Payroll taxes payableThe amount of payroll taxes owed to the various governments at the end of a period. Personal tax view (of capital structure)The argument that the difference in personal tax rates between predetermined overhead ratean estimated constant charge per unit of activity used to assign overhead cost to production or services of the period; it is calculated by dividing total budgeted annual overhead at a selected level of volume or activity by that selected measure of volume or activity; it is also the standard overhead application rate Profit before interest and taxes (PBIT)See EBIT. Progressive TaxA tax in which the rich pay a larger percentage of income than the poor. Contrast with regressive tax. Progressive tax systemA tax system wherein the average tax rate increases for some increases in income but Proportional TaxA tax taking the same percentage of income regardless of the level of income. Regressive TaxA tax in which the poor pay a larger percentage of income than the rich. Contrast with progressive tax. Repayment TermsThe length of time given a borrower by a lender to repay a debt and the frequency of principal payments which the borrower has to meet. Roth IRA. An IRA account whose earnings are not taxable at all under certaincircumstances. Sales TaxA tax levied as a percentage of retail sales. Selling shortIf an investor thinks the price of a stock is going down, the investor could borrow the stock from ShortOne who has sold a contract to establish a market position and who has not yet closed out this position Short bondsBonds with short current maturities. Short bookSee: unmatched book. Short hedgeThe sale of a futures contract(s) to eliminate or lessen the possible decline in value ownership of Short interestThis is the total number of shares of a security that investors have borrowed, then sold in the Short positionOccurs when a person sells stocks he or she does not yet own. Shares must be borrowed, Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |