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Definition of suboptimization
a situation in which an individual manager
Cumulative gains or losses reported in shareholders'
A signalling device.
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
Large and creditworthy company.
A mortgage loan on newly developed property that the builder subsidizes during the
Mortgages in which monthly payments consist of principal and interest, with portions of these
Selecting specific assets for sale so as to record desired gains or losses.
Value of outstanding common shares at par, plus accumulated retained
Assets acquired to create money. May include plant, machinery and equipment, shares of another company etc.
Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.
Related: Unsystematic risk
See asset-specific risk
This is the person designated to become the new owner of a life insurance policy if the original owner dies before the life insured.
Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of
The ability of the bankruptcy court to confirm a plan of reorganization over the objections of
A particularly profitable or otherwise particularly valuable corporate unit or asset of a firm.
Depository Trust Company (DTC)
DTC is a user-owned securities depository which accepts deposits of
Barrier option that comes into existence if asset price hits a barrier.
Barrier option that expires if asset price hits a barrier.
A classic negative change in ratings for a stock, and or other rated security.
any management action that reduces employment
An agreement permitting a bank customer to borrow either domestic dollars from the
In the interbank Eurodollar deposit market, an either-way market is one in which the bid
Employee stock ownership plan (ESOP)
A company contributes to a trust fund that buys stock on behalf of
Employee Stock Ownership Plan (ESOP)
a profit-sharing compensation program in which investments are made in
Employee Stock Ownership Plan (ESOP)
A fund containing company stock and owned by employees, paid for by ongoing contributions by the employer.
company engaged in making loans to individuals or businesses. Unlike a bank, it does not receive deposits from the public.
objectives of a financial nature that the firm will strive to accomplish during the period
A theory that nominal interest rates in two or more countries should be equal to the required real
the rate of return that equates the present values
Fisher's separation theorem
The firm's choice of investments is separate from its owner's attitudes towards
Group rotation manager
A top-down manager who infers the phases of the business cycle and allocates
A money manager who seeks to buy stocks that are typically selling at relatively high P/E
The risk of loss in foreign exchange trading that one party will deliver foreign exchange but the counterparty financial institution will fail to deliver its end of the contract. It is also referred to as settlement risk.
a cost incurred in the past; the recorded purchase
The original cost required to perform a service or purchase an asset.
Historical exchange rate
An accounting term that refers to the exchange rate in effect when an asset or
A corporation that owns enough voting stock in another firm to control management and
Insurance that is offered to individuals rather than groups.
Individual Retirement Account
A personal savings account into which a defined
Individual Retirement Annuity
An IRA comprised of an annuity that is managed
A firm licensed to sell insurance to the public.
Loan made by one unit of a corporation to another unit of the same corporation.
Transaction carried out between two units of the same corporation.
International Fisher effect
States that the interest rate differential between two countries should be an
international Fisher effect
Theory that real interest rates in all countries should be equal, with differences in nominal rates reflecting differences in expected inflation.
Refers to making an entry, usually at the close of a
Also called a portfolio manager and money manager, the individual who manages a
The commercial or investment bank with the primary responsibility for organizing syndicated
limited liability company
an organizational form that is a hybrid of the corporate and partnership organizational
Decisions concerning the operation of the firm, such as the choice of firm size, firm
Market segmentation theory or preferred habitat theory
A biased expectations theory that asserts that the
Related: Investment manager.
A cluster of accounts that are listed after fixed assets on the balance sheet,
In the balance of payments, other capital is a residual category that groups all the capital
Other current assets
Value of non-cash assets, including prepaid expenses and accounts receivable, due
Other long term liabilities
Value of leases, future employee benefits, deferred taxes and other obligations
Amount of funds generated during the period from operations by sources other than
Other-than-Temporary Decline in Market Value
The standard used to describe a decline in market value that is not expected to recover. The use of the other-than-temporary description as
This is the person who owns the insurance policy. It is usually the same person as the insured but it could be someone else who has the permission of the insured to be the owner, like a spouse, a common-law-spouse, an offspring, a parent, a corporation with insurable interest or a business partner with insurable interest. In order for someone else to be an owner of your policy, they have to have a legitimate insurable interest in you.
Refers to the capital invested in a business by its shareowners
The total of all capital contributions and retained earnings on a business’s
A company that retains control over one or more other companies.
In a Treasury refunding, the amount by which the par value of the securities maturing exceeds that
The person who owns and holds all rights under the policy, including the power to name and change beneficiaries, make a policy loan, assign the policy to a financial institution as collateral for a loan, withdraw funds or surrender the policy.
Pooling of interests
An accounting method for reporting acquisitions accomplished through the use of equity.
Pooling of interests
An method for accounting for a business combination. When used, the expenses of the combination are charged against income at once, and the net
Related: Investment manager
Realizable Revenue A revenue transaction where assets received in exchange for goods and
services are readily convertible into known amounts of cash or claims to cash.
A preliminary prospectus containing information required by the SEC. It excludes the offering
Retail investors, individual investors
Small investors who commit capital for their personal account.
the excess of revenues over direct variable expenses and avoidable fixed expenses for a particular segment
A portion of the financial statements that breaks out the results of
an individual or firm engaged in a high or moderate degree of conversion that results in service output
STOCKHOLDERS’ (OR OWNERS’) EQUITY
The value of the owners’ interests in a company.
A company that is controlled by another company through ownership
Top-down equity management style
A management style that begins with an assessment of the overall
Organization 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.
A manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at
A report listing every product whose bill of material calls for
Decreasing the book value of an asset if its book value is overstated compared to current market values.
A reduction in the balance-sheet valuation of an asset with an accompanying
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