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Definition of SIC
Abbreviation for Standard Industrial Classification. Each 4-digit code represents a unique business activity.
In a balance of payments, the basic balance is the net balance of the combination of the current
Key strategies a firm intends to pursue in carrying out its business plan.
Accept the project if IRR is greater than the discount rate; reject the project is lower than the
The amount by which an option is in-the-money. An option which is not in-themoney
The present value of a firm's expected future net cash flows discounted by the
Interest rate options written on fixed-income securities, as opposed to those written on
This important ratio equals the net
Percentage of earnings relative to total assets; indication of how
a method of allocating a joint cost to products that uses a common physical characteristic as the proration base
The school of macroeconomic thought prior to the rise of Keynesianism.
Economists who, like classical economists, believe that wages and prices are sufficiently flexible to solve the unemployment problem without help from government policy.
A fixed amount of pay benefit available to employees who cannot
A manual count of the on-hand inventory.
The physical commodity underlying a futures contract. Cash commodity, physical.
Bonds that are not registered on the books of the issuer. Such bonds are held in physical form by
The actual physical commodity, as distinguished from a futures contract.
Underwriters, actual or potential, often seek out and "circle" investor interest in a new issue before
A commodity is food, metal, or another physical substance that investors buy or sell, usually via
Discounted dividend model (DDM)
A formula to estimate the intrinsic value of a firm by figuring the
A classic negative change in ratings for a stock, and or other rated security.
First notice day
The first day, varying by contracts and exchanges, on which notices of intent to deliver
Foreign direct investment (FDI)
The acquisition abroad of physical assets such as plant and equipment, with
A term used to designate all contracts covering the sale of financial instruments or physical
A term used to designate all contracts covering the sale of financial instruments or physical
An option on a futures contract. Related: options on physicals.
A secured short-term loan to purchase inventory. The three basic forms are a blanket
Last trading day
The final day under an exchange's rules during which trading may take place in a particular
A tangible asset with unique physical properties, like a parcel of land, a mine, or a
Contracts which have been bought or sold without the transaction having been completed by
Adjustment mechanism under the classical gold standard whereby
A tangible asset with physical properties that can be reproduced, such as a building or
Procedure by which the Long or short position of an individual is offset by an opposite
The sale of a futures contract(s) to eliminate or lessen the possible decline in value ownership of
The current marketprice of the actual physical commodity. Also called cash price.
An asset whose value depends on particular physical properties. These i nclude reproducible
Also called time value, the amount by which the option price exceeds its intrinsic value. The
Time value of an option
The portion of an option's premium that is based on the amount of time remaining
The time, effort, and money necessary, including such things as commission fees and the
A technique by which a company recovers the high cost of its plant-and-equipment assets gradually during the number of years they’ll be used in the business. Depreciation can be physical, technological, or both.
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.
Intangible fixed assets
Non-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks).
Tangible fixed assets
Physical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc.
One of the basic financial statements; it lists the assets, liabilities, and equity accounts of the company. The Balance Sheet is prepared using the balances at the end of a specific day.
One of the basic financial statements; it lists the revenue and expense accounts of the company.
Assets owned by the company that do not possess physical substance; they usually take the form of rights and privileges such as patents, copyrights, and franchises.
Statement of Cash Flows
One of the basic financial statements; it lists the cash inflows and cash outflows of the company, grouped into the categories of operating activities, financing activities, and investing activities. The Statement of Cash Flows is prepared for a specified period of time.
Statement Retained Earnings
One of the basic financial statements; it takes the beginning balance of retained earnings and adds net income, then subtracts dividends. The Statement of Retained Earnings is prepared for a specified period of time.
An equation that reflects the two-sided nature of a
capital investment analysis
Refers to various techniques and procedures
capital structure, or capitalization
Terms that refer to the combination of
diluted earnings per share (EPS)
This measure of earnings per share
earnings per share (EPS)
See basic earnings per share and diluted earnings per share.
Refers to one of the two basic sources of capital for a business, the
A term describing the loss of products from inventory
Refers to the capital invested in a business by its shareowners
price/earnings ratio (price to earnings ratio, P/E ratio, PE ratio)
This key ratio equals the current market price
This depreciation method allocates a uniform
the creation of multi-country markets
Internet business model
a model that involves
personalized production generally accomplished
a restriction in a linear programming
the set of basic assumptions about
the physical production or service volume that a firm could achieve during normal working hours with consideration given to ongoing, expected operating interruptions
A method of pricing options or other equity derivatives in
A nonphysical asset with a life greater than one year. Examples are
a) Physical capital: buildings, equipment, and any materials used to produce other goods and services in the future rather than being consumed today.
The total amount of plant, equipment, and other physical capital.
Basic facilities, such as transportation, communication, and legal systems, on which economic activity depends.
User Cost of Capital
The implicit annual cost of investing in physical capital, determined by things such as the interest rate, the rate of depreciation of the asset, and tax regulations. What would be paid to rent this capital if a rental market existed for it.
A shortfall between inventory based on actual physical counts and inventory
A reduction in the physical quantity of an inventory that is accounted for
Inventory that has been physically marked as being for a
A physical inventory count taken on a repetitive basis.
As non-smoking rates caused a major reduction in the cost of life insurance in the early 1980's, the emergence of preferred non-smoker rates in 1998 has caused another noteworthy reduction in rates. A growing number of insurance companies are offering better rates which go beyond simply looking at gender or smoking habits. Other health related factors such as physical build, lifestyle, avocation and personal and family health history indicating longer life expectancy can add up to significant cost savings to new life insurance applicants. Make certain to ask about these new preferred rates.
This subject of replacement of existing policies is covered because sometimes existing life insurance policies are unnecessarily replaced with new coverage resulting in a loss of valuable benefits. If someone suggests replacing your existing coverage, insist on having a comparison disclosure statement completed.
Split Dollar Life Insurance
The split dollar concept is usually associated with cash value life insurance where there is a death benefit and an accumulation of cash value. The basic premise is the sharing of the costs and benefits of a life insurance policy by two or more parties. Usually one party owns and pays for the insurance protection and the other owns and pays for the cash accumulation. There is no single way to structure a split dollar arrangement. The possible structures are limited only by the imagination of the parties involved.
Historically, damages paid out during settlement of personal physical injury cases were distributed in the form of a lump-sum cash payment to the plaintiff. This windfall was intended to provide for a lifetime of medical and income needs. The claimant or his/her family was then forced into the position of becoming the manager of a large sum of money.
Temporary Life Insurance
Temporary insurance coverage is available at time of application for a life insurance policy if certain conditions are met. Normally, temporary coverage relates to free coverage while the insurance company which is underwriting the risk, goes through the process of deciding whether or not they will grant a contract of coverage. The qualifications for temporary coverage vary from insurance company to insurance company but generally applicants will qualify if they are between the ages of 18 and 65, have no knowledge or suspicions of ill health, have not been absent from work for more than 7 days within the prior 6 months because of sickness or injury and total coverage applied for from all sources does not exceed $500,000. Normally a cheque covering a minimum of one months premium is required to complete the conditions for this kind of coverage. The insurance company applies this deposit towards the cost of a policy at its issue date, which may be several weeks in the future.
This is a legal document detailing how you want your assets to be distributed upon your death. You may also stipulate how you wish to be buried or who you would like to take care of any surviving dependent family members. In my opinion, it is very important to be quite specific about your wishes for the distribution of special assets such as the antique grandfather clock, the classic silver tea set or the antique piano. If you think that your beneficiaries may dispute how your things are to be distributed, consider stipulating that an auction be held in which all beneficiaries may bid on the item which they value and all moneys collected are then shared in the same manner in which you distributed your other liquid assets. Your might want to remember that a will is automatically revoked upon marriage unless the will specifically states that the will is made in contemplation of marriage.
Any asset or stock of assets, financial or physical, capable of producing income.
Inability to work due to injury or sickness.
Disability Insurance (Credit Insurance)
Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.
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