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Definition of stakeholder
Anyone with a financial interest in the firm.
All parties that have an interest, financial or otherwise, in a firm - stockholders, creditors,
The process of satisfying stakeholders in the organization that managers have acted in the best interests of the stakeholders, a result of the stewardship function of managers, which takes place through accounting.
The number of shares that are actively tradable in the market, excluding shares that are held by officers
the preference of a manager in how he/she interacts with other stakeholders in the organization;
A federal Act expanding upon many of the insurance reforms created by
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
A characterization used by the Securities and Exchange
A collection of systems and processes used to record, report and interpret business transactions.
A broad, All-inclusive term that refers to the methods and procedures
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
An alteration in the accounting methodology or estimates used in
Earnings of a firm as reported on its income statement.
A business for which a separate set of accounting records is being
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The formula Assets = Liabilities + Equity.
An equation that reflects the two-sided nature of a
Unintentional mistakes in financial statements. Accounted for by restating
The change in the value of a firm's foreign currency denominated accounts due to a
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
Intentional misstatements or omissions of amounts or disclosures in
The ease and quickness with which assets can be converted to cash.
The period of time for which financial statements are produced – see also financial year.
The principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements.
Accounting rate of return (ARR)
A method of investment appraisal that measures
accounting rate of return (ARR)
the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
The recording of revenue when earned and expenses when
Well, frankly, accrual is not a good descriptive
A method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred.
The accumulated coupon interest earned but not yet paid to the seller of a bond by the
The amount of interest accumulated on a debt security between
The amount of interest owing but not paid.
acid test ratio (also called the quick ratio)
The sum of cash, accounts receivable, and short-term marketable
activity-based management (ABM)
a discipline that focuses on the activities incurred during the production/performance process as the way to improve the value received
A bond covenant that specifies certain actions the firm must take.
Mortgage pass-through securities whose principal and interest payments are
Aggregate Production Function
An equation determining aggregate output as a function of aggregate inputs such as labor and capital.
A forceful and intentional choice and application of accounting principles
All equity rate
The discount rate that reflects only the business risks of a project and abstracts from the
Total costs, explicit and implicit.
All or none
Requirement that none of an order be executed unless All of it can be executed at the specified price.
An arrangement whereby a security issue is canceled if the underwriter is unable
assign based on the use of a cost driver, a cost predictor,
the systematic assignment of an amount to a recipient
The process of storing costs in one account and shifting them to other
Allocation base A measure of activity or volume such as labour
hours, machine hours or volume of production
Allowance for bad debts
An offset to the accounts receivable balance, against which
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
Allowance for Doubtful Accounts
An estimate of the uncollectible portion of accounts receivable
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
Amortizing interest rate swap
Swap in which the principal or national amount rises (fAlls) as interest rates
approximated net realizable value at split-off allocation
a method of Allocating joint cost to joint products using a
Asset allocation decision
The decision regarding how an institution's funds should be distributed among the
Also cAlled surplus management, the task of managing funds of a financial
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Any large principal payment due at maturity for a bond or loan with or without a a sinking
Base interest rate
Related: Benchmark interest rate.
Benchmark interest rate
Also cAlled the base interest rate, it is the minimum interest rate investors will
A method of securities distribution/ underwriting in which the securities firm agrees to sell
The requirement that a claim holder voting against a plan of reorganization
In the mortgage pipeline, the risk that prospective borrowers of loans committed to be
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
business process reengineering (BPR)
the process of combining information technology to create new and more effective
An option that gives the right to buy the underlying futures contract.
a. An option to buy a certain quantity of a stock or commodity for a
Call an option
To exercise a cAll option.
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
Call money rate
Also cAlled the broker loan rate , the interest rate that banks charge brokers to finance
An option contract that gives its holder the right (but not the obligation) to purchase a specified
A contract that gives the holder the right to buy an asset for a
Right to buy an asset at a specified exercise price on or before the exercise date.
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a cAll provision.
A feature of some cAllable bonds that establishes an initial period when the bonds may not be
An embedded option granting a bond issuer the right to buy back All or part of the issue prior
The combination of cash flow uncertainty and reinvestment risk introduced by a cAll provision.
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
A financial security such as a bond with a cAll option attached to it, i.e., the issuer has the right to
A bond that Allows the issuer to buy back the bond at a
Bond that may be repurchased by the issuer before maturity at specified cAll price.
decision Allocation of invested funds between risk-free assets versus the risky portfolio.
Capital Consumption Allowance
Capital Cost Allowance (CCA)
The annual depreciation expense Allowed by the Canadian Income Tax Act.
interest that is not immediately expensed, but rather is considered as an asset and is then
interest incurred during the construction period on monies invested in
A method of accounting in which profit is calculated as the difference between income
Cash flow after interest and taxes
Net income plus depreciation.
Cash management bill
Very short maturity bills that the Treasury occasionAlly sells because its cash
Certified Management Accountant (CMA)
a professional designation in the area of management accounting that
Change in Accounting Estimate
A change in accounting that occurs as the result of new information
Change in Accounting Estimate
A change in the implementation of an existing accounting
Change in Accounting Principle
A change from one generAlly accepted accounting principle to another generAlly accepted accounting principle—for example, a change from capitalizing expenditures
Changes in Financial Position
Sources of funds internAlly provided from operations that alter a company's
chief financial officer (CFO)
Officer who oversees the treasurer and controller and sets overAll financial strategy.
Communication barrier between financiers (investment bankers) and traders. This barrier is
interest paid on previously earned interest as well as on the principal.
interest paid on principal and on interest earned in previous
a method of determining interest in which interest that was earned in prior periods is added to the original investment so that, in each successive period, interest is earned on both principal and interest
interest earned on interest.
interest earned on an investment at periodic intervals and added to principal and previous interest earned. Each time new interest earned is calculated it is on a combined total of principal and previous interest earned. EssentiAlly, interest is paid on top of interest.
he written statement that follows any "trade" in the securities markets. Confirmation is issued
Conflict between bondholders and stockholders
These two groups may have interests in a corporation that
Constant dollar accounting
A method for restating financial statements by reducing or
The relationship between consumption demand and disposable income. More generAlly, it refers to the relationship between consumption demand and All factors that affect this demand.
Method of accounting for sales or service agreements where completion
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