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Definition of Significant Influence
The extent of influence of an investor over the operating and financial
Accounting method for an equity security in cases where the investor has sufficient
An identifying number assigned to a part that conveys
An identifying number assigned to an item that conveys
An entity whose management or operating policies can be controlled or significantly
an organizational unit that performs management activities benefiting the entire organization;
a process of service department cost allocation
The discount rate that reflects only the business risks of a project and abstracts from the
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
The ratio of total assets to stockholder equity.
The inventory cost-flow assumption that assigns the average
The proportion of unemployment benefits paid to a company’s
The proportion of total taxable wages for laid off
An arithmetic method for backing an
A management style that de-emphasizes the significance of economic
A method of constructing a replicating portfolio in which the manager purchases a
An internal department within a company staffed by specialists in collecting past due accounts or accounts receivable.
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
A contract accounting method that recognizes contract revenue
An account that reduces an equity account. An example is Treasury stock.
Cost of Equity
Same as the cost of common stock. Sometimes viewed as the
Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital
In the balance of payments, counterpart items are analogous to unrequited transfers in the
The parties to an interest rate swap.
on the other side of a trade or transaction.
The risk that the other party to an agreement will default. In an options contract, the risk
Current rate method
Under this currency translation method, all foreign currency balance-sheet and income
Indicator of financial leverage. Compares assets provided by creditors to assets provided
A comparison of debt to equity in a company's capital structure.
A widely used financial statement ratio to assess the
A common term for convertible bonds because of their equity component and the
The informal and frequently unauthorized retention of excess inventory on the shop floor, which is used as buffer safety stock.
Direct estimate method
A method of cash budgeting based on detailed estimates of cash receipts and cash
A method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows.
a service department cost allocation approach
A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.
Direct write-off method
A method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers.
dividend growth method
a method of computing the cost
Dual syndicate equity offering
An international equity placement where the offering is split into two
Represents ownership interest in a firm. Also the residual dollar value of a futures trading account,
Funds raised from shareholders.
Amounts contributed to the company by the owners (contributed capital) plus the residual earnings of the business (retained earnings).
Refers to one of the two basic sources of capital for a business, the
The difference between the total of all recorded assets and liabilities on the balance
Ownership. Common stock represents equity in a corporation.
The net worth of a business, consisting of capital stock, capital (or paid-in) surplus (or retained earnings), and, occasionally, certain net worth reserves. Common equity is that part of the total net worth belonging to the common shareholders. Total equity includes preferred shareholders. The terms common stock, net worth, and common equity are frequently used interchangeably.
The net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares or stocks are often known as equities.
Life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Refers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount.
An agreement in which one party, for an upfront premium, agrees to compensate the other at
Also called a residual claim, a claim to a share of earnings after debt obligation have been
The simultaneous purchase of an equity floor and sale of an equity cap.
Equity contribution agreement
An agreement to contribute equity to a project under certain specified
An agreement in which one party agrees to pay the other at specific time periods if a specific
Through equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock.
Used to refer to warrants because they are usually issued attached to privately placed bonds.
Related: Variable life
Total assets divided by total common stockholders' equity; the amount of total assets per
Securities that give the holder the right to buy or sell a specified number of shares of stock, at
An ownership interest in an enterprise, including preferred and common stock.
A swap in which the cash flows that are exchanged are based on the total return on some stock
Those holding shares of the firm's equity.
Securities sold in the Euromarket. That is, securities initially sold to investors
Federal Employer Identification Number
A unique identification number issued
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
Financial Numbers Game
The use of creative accounting practices to alter a financial statement
First in, first-out costing method (FIFO)
A process costing methodology that assigns the earliest
First-In, First-Out (FIFO) Inventory Method
The inventory cost-flow assumption that
The practice of reporting to shareholders using straight-line depreciation and
Foreign equity market
That portion of the domestic equity market that represents issues floated by foreign companies.
A method of accounting for petroleum exploration and development expenditures
GEMs (growing-equity mortgages)
Mortgages in which annual increases in monthly payments are used to
A partner who has unlimited liability for the obligations of the partnership.
A partnership in which all partners are general partners.
a technique used to determine the fixed
A method of preparing the operating section of the Statement of Cash Flows that does not use the company’s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities.
A format for the operating section of the cash-flow statement that
The balance of a margin account. Related: buying on margin, initial margin requirement.
A number uniquely identifying a product or component.
judgmental method (of risk adjustment)
an informal method of adjusting for risk that allows the decision maker
Last-In, First-Out (LIFO) Inventory Method
The inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory
Law of large numbers
The mean of a random sample approaches the mean (expected value) of the
Stock in a firm that relies on financial leverage. Holders of leveraged equity face the
limited liability partnership
an organizational form that is a hybrid of the corporate and partnership organizational
A partner who has limited legal liability for the obligations of the partnership.
A partnership that includes one or more partners who have limited liability.
A partnership that includes one or more partners who have limited liability.
Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the
Long-term debt to equity ratio
A capitalization ratio comparing long-term debt to shareholders' equity.
Master limited partnership (MLP)
A publicly traded limited partnership.
method of least squares
see least squares regression analysis
method of neglect
a method of treating spoiled units in the
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Moving average inventory method
An inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase.
net present value method
a process that uses the discounted
Net Present Value (NPV) Method
A method of ranking investment proposals. NPV is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment.
A type of insurance policy or annuity in which the owner does not receive dividends.
The practice of making a charge in the income account equivalent to the tax savings
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 haven’t been collected yet.
Refers to the capital invested in a business by its shareowners
The total of all capital contributions and retained earnings on a business’s
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